Online sales drop, in-store sales increase in October as customers continue to return to stores – Industry

Shoppers like these in Belfast return to stores regularly – while doing a greater portion of their shopping online. Willy Barton / shutterstock_1107448076.jpg

Retail sales appeared to be moving closer to pre-pandemic spending patterns last month, with online sales falling 8% year-on-year while in-store sales rose 7.9% in the three months preceding October. Total retail sales growth for the month was 1.3%, compared to the same period last year.

The 8% drop in non-food e-commerce sales, shown in the latest BRC-KPMG retail sales index, is below the three-month average of 6.1%.

But for now, the “new normal” includes a greater proportion of online sales than before the pandemic, while fewer sales are taking place in-store than before the pandemic. About 42% of non-food sales took place online in October. That’s 5.2 percentage points (pp) lower than the 48.8% of sales that were online a year earlier, but 10.4 percentage points higher than the 31.6% of sales that were online October 2019.

At the same time, in-store sales increased 7.9% overall in the three months to October and 4.5% LFL. However, they remain 2% lower than before the October 2019 pandemic and 4.4% lower than the LFL.

Confident consumers are heading to brick-and-mortar stores to shop, as online sales fell further in October, although with penetration rates of 42%, online purchases remain well above prior levels. Covid-19, “said Paul Martin, UK retail manager. at KPMG. “The much-talked-about cutbacks in household spending have yet to materialize as consumers seem happy to continue shopping.

“Limited inventory availability has created strong pricing momentum, which means we likely won’t see big discounts this Christmas, and many retailers are hoping consumers are ready to buy the most wanted gifts at any time. what price. With rising costs straining most retailers, they will have every hope that demand remains strong as consumers anticipate an exceptional Christmas, buying early for those much sought-after gifts and spending more than last year when the rallies. Christmas celebrations have been canceled. The main concern now is how the trade will develop after Christmas until 2022. “

Overall UK retail sales increased 1.3% overall in October, compared to the same period last year, but decreased 0.2% at constant scope which excludes the effect store openings and temporary closures, the latest The BRC-KPMG retail sales index suggests.

Helen Dickinson, Managing Director of the British Retail Consortium, said: “Customer demand is back on track ahead of Christmas as sales grew at a faster pace than the previous month and well above their levels. before the pandemic. As social calendars began to fill with festivities, clothing and footwear sales performed well. Meanwhile, furniture and power sales have been hampered by global logistics issues and chip shortages. With Halloween sharply reduced by the pandemic last year, chocolates and children’s costumes sold as a treat as families made the most of the opportunity.

“Some people have started their Christmas shopping early with beauty advent calendars flying off the shelves and searches for Christmas items are increasing online. Retailers are doing all they can to provide customers with the choice and availability required throughout the industry’s busiest time, prioritizing food and other festive products needed to celebrate. Retailers are hoping that demand will continue throughout the Golden Quarter, however, there are challenges ahead with higher prices on the horizon, made worse by the many rising costs consumers face, such as higher energy bills and rising national insurance. “

Food sales increased 1.5% overall and 0.3% LFL. Non-food retail sales increased 1.8% overall – below the 12-month average of 14.9% – and fell 0.1% LFL. Non-food sales were also 7.4% higher than two years ago, in the three months to October.

Buyers spend more, but worry about inflation

Meanwhile, Barclaycard figures suggest UK adults spent 14.2% more on credit and debit cards in October, with spending on essentials (+ 13.2%) – including in supermarkets and other food stores (+ 14.2%) – and on non-essential goods – including online take-out (+ 127%) and digital content and subscriptions (+ 38.6%). Online spending in toy stores and stores dedicated to children (+ 38.4%) also increased, probably before Christmas.

Almost nine in 10 (88%) in 2,000 consumers, polled in a survey conducted by Longitude Research on behalf of Barclaycard, said they were worried about the effect of inflation on their finances, while 89 % are concerned about the impact of rising bills on their finances. More than a third (34%) say they are concerned about shortages, of which 52% say they buy Christmas presents earlier than usual. Almost three in 10 (28%) will do so by shopping during Black Friday or other seasonal sales.

Jose Carvalho, Head of Consumer Products at Barclaycard, said: “The costly festive period on the horizon, combined with lingering concerns about the impact of inflation and supply chain shortages, has meant that we saw stable but cautious spending by consumers in October.

“While the uncertainty surrounding rising household bills seems to weigh on the minds of Britons, the encouraging growth we have seen in entertainment and international travel shows that consumers are still keen to enjoy leisure activities and vacation. As the country continues its Christmas shopping and gears up for Black Friday and other sales, we are confident that November should bring some zest for life to retailers. “

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David A. Albanese

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