In its latest report, the ONS has revealed that retail sales volumes fell by 1.4 per cent in March ’22, following a fall of 0.5 per cent in February. The proportion of online sales fell to 26 per cent in March which is its lowest proportion since February 2020 and continues a broad downward trend since its peak in February 2021 when it reached 37.1 per cent.
With stores re-opened, consumers have been less reliant on buying online and are now more likely to shop around in person before making larger purchases. Notably, household goods stores’ sales volumes were up by 2.6 per cent in March 2022, due says ONS to growth in DIY stores (4.9 per cent) and furniture and lighting stores (4.7 per cent).
Many multichannel retailers, as well as those selling primarily online, have noted that customers are buying less and less often. Purchases are being more carefully considered. High fuel costs have been taking a higher percentage of customers’ disposable incomes coupled with food retail prices edging upwards. There is also considerable consumer anxiety about the extent of the electricity and gas price increases expected and the reality of being able to afford them. Add to this the impact of the invasion of Ukraine and little wonder that people are cutting back where they can.
These problems are not exclusive to the UK. Most of Europe is being similarly impacted and with supply chain costs increasing, more retailers are going to have to raise prices to consumers. The irony is that having suffered supply chain delays during the height of Covid related lockdowns and finding themselves unable to meet demand, many retailers are now stocked to the gunnels with reducing consumer demand.
The recent coverage concerning the exodus of Netflix subscribers is being mirrored by many other subscription-based ‘non-essential’ commitments as consumers take steps to reduce their outgoings, where they can, in order to be able to prioritise being able to cover higher basic living costs.
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