Online sales in the run-up to Christmas were not significantly affected by strike action, while the impact of the Fifa World Cup on spending was lower than expected, a new ONS study suggests. However, spending across channels was higher on 2022 sale days such as Black Friday and Boxing Day than it was a year earlier. That was probably as shoppers looked for bargains. But while shoppers spent more, their buying power decreased in the face of inflation.
Online sales in the run-up to Christmas were not significantly affected by strike action, while the impact of the Fifa World Cup on spending was lower than expected, a new ONS study suggests. However, spending across channels was higher on 2022 sale days such as Black Friday and Boxing Day than it was a year earlier. That was probably as shoppers looked for bargains. But while shoppers spent more, their buying power decreased in the face of inflation.
The report comes in the week that the latest Gfk Consumer Confidence Index shows a surprise seven point improvement in February (to -38). All of the five measures it tracks were up in comparison to a month earlier.
Joe Staton, client strategy director at GfK says: “Despite widely reported headwinds of inflation continuing to outstrip wage rises, and the ongoing household challenge from the cost-of-living crisis, consumers have suddenly shown more optimism about the state of their personal finances and the general economic situation, especially for the coming year. While it’s too early to talk about ‘green shoots of recovery’, the uptick across all measures should be welcomed. But what’s happening? Are people simply fed up with hearing bad news? Do they see a milder recession than the pundits predicted? Do they sense the most worrying phase of the energy crisis is over?
“The headline consumer confidence score is still severely depressed and the mood as well as the economy remain a long way off pre-lockdown levels, but a little consumer resilience might be what we need to soften any downturn in 2023.”
How has spending changed this winter?
ONS statisticians analysed spending data from Revolut covering the winter of 2022/2023 in comparison with previous winters for a new piece of research, How discretionary spending has been affected in recent winters, UK 2019 to 2023.
The new ONS report cites figures from its own Retail Sales report which suggests that the proportion of sales taking place online fell to 25.4% in December, representing a “small decrease” from 25.9%. The ONS had previously said in its Retail Sales report for December 2022 that there was “anecdotal evidence that Royal Mail strikes led to consumers shopping in stores more.
However, its latest analysis suggests that was not the case. “If postal strikes in December 2022 potentially pushed consumers onto the high street and away from online, then the change was very small,” says its latest research.
Meanwhile, in-store spending was flat during rail strikes on December 16 and 17.
The report also says that shoppers spent more both this winter and last on clothing and footwear than in previous festive periods, partly as a result of rising prices. The average inflation rate between November 2022 and January 2023 was 6.7% for clothing and footwear, says the ONS. However the volume of clothing sales rose by 1.1% in November 2022 and 1% in December 2022, as shoppers spent more to maintain their spending on clothing and footwear.
Spending peaked on Black Friday when Revolut spending was 31.3% higher than Boxing Day and 77% higher than New Year’s Day. Compared to the previous year, says the report, retail footfall was also nearly 40% higher on Boxing Day than the previous year, suggesting “consumers may be attempting to take advantage of sale days to get more for their money”. Meanwhile, shoppers nether spent more or cut back on entertainment spending during the World Cup, despite expectations to the contrary.
The ONS cautions that Revolut data typically reflects the spending of younger and more metropolitan shoppers than the population as a whole.
Commenting, David Jinks, head of consumer research at ParcelHero, says: “It seems that now is not the winter of our discontent. It looks as if consumer spending this winter has been just as robust as it was both pre-pandemic and before the sharp rise in inflation and household energy bills. Shoppers may have said that they were going to spend less but, in fact, they ended up spending around the same amount as in previous winters.
“This report dispels some of the myths that have already formed around this year’s Christmas trading. It finds no evidence we abandoned upmarket supermarkets for discount stores. It also reveals that postal strikes had little impact on online sales; High Street sales didn’t peak until 22 December, following the pattern of previous years.” At this same time there was no World Cup boom and bust and clothing and footwear sales were higher than expected, he says.
Results were better than expected, suggests Jinks, in part because shoppers did not stick to their spending resolutions. An ONS survey in early December found 60% told the ONS they planned to cut back on spending over Christmas. “In reality,” says Jinks, “card spending figures from Revolut suggest that consumer spending was more resilient than expected, despite the negative pre-Christmas sentiment.”
. All of the five measures it tracks were up in comparison to a month earlier.
Joe Staton, client strategy director at GfK says: “Despite widely reported headwinds of inflation continuing to outstrip wage rises, and the ongoing household challenge from the cost-of-living crisis, consumers have suddenly shown more optimism about the state of their personal finances and the general economic situation, especially for the coming year. While it’s too early to talk about ‘green shoots of recovery’, the uptick across all measures should be welcomed. But what’s happening? Are people simply fed up with hearing bad news? Do they see a milder recession than the pundits predicted? Do they sense the most worrying phase of the energy crisis is over?
“The headline consumer confidence score is still severely depressed and the mood as well as the economy remain a long way off pre-lockdown levels, but a little consumer resilience might be what we need to soften any downturn in 2023.”
How has spending changed this winter?
ONS statisticians analysed spending data from Revolut covering the winter of 2022/2023 in comparison with previous winters for a new piece of research, How discretionary spending has been affected in recent winters, UK 2019 to 2023.
The new ONS report cites figures from its own Retail Sales report which suggests that the proportion of sales taking place online fell to 25.4% in December, representing a “small decrease” from 25.9%. The ONS had previously said in its Retail Sales report for December 2022 that there was “anecdotal evidence that Royal Mail strikes led to consumers shopping in stores more.
However, its latest analysis suggests that was not the case. “If postal strikes in December 2022 potentially pushed consumers onto the high street and away from online, then the change was very small,” says its latest research.
Meanwhile, in-store spending was flat during rail strikes on December 16 and 17.
The report also says that shoppers spent more both this winter and last on clothing and footwear than in previous festive periods, partly as a result of rising prices. The average inflation rate between November 2022 and January 2023 was 6.7% for clothing and footwear, says the ONS. However the volume of clothing sales rose by 1.1% in November 2022 and 1% in December 2022, as shoppers spent more to maintain their spending on clothing and footwear.
Spending peaked on Black Friday when Revolut spending was 31.3% higher than Boxing Day and 77% higher than New Year’s Day. Compared to the previous year, says the report, retail footfall was also nearly 40% higher on Boxing Day than the previous year, suggesting “consumers may be attempting to take advantage of sale days to get more for their money”. Meanwhile, shoppers nether spent more or cut back on entertainment spending during the World Cup, despite expectations to the contrary.
The ONS cautions that Revolut data typically reflects the spending of younger and more metropolitan shoppers than the population as a whole.
Commenting, David Jinks, head of consumer research at ParcelHero, says: “It seems that now is not the winter of our discontent. It looks as if consumer spending this winter has been just as robust as it was both pre-pandemic and before the sharp rise in inflation and household energy bills. Shoppers may have said that they were going to spend less but, in fact, they ended up spending around the same amount as in previous winters.
“This report dispels some of the myths that have already formed around this year’s Christmas trading. It finds no evidence we abandoned upmarket supermarkets for discount stores. It also reveals that postal strikes had little impact on online sales; High Street sales didn’t peak until 22 December, following the pattern of previous years.” At this same time there was no World Cup boom and bust and clothing and footwear sales were higher than expected, he says.
Results were better than expected, suggests Jinks, in part because shoppers did not stick to their spending resolutions. An ONS survey in early December found 60% told the ONS they planned to cut back on spending over Christmas. “In reality,” says Jinks, “card spending figures from Revolut suggest that consumer spending was more resilient than expected, despite the negative pre-Christmas sentiment.”
