Home Business News Recession? What recession? Retail sales buck the trend, says expert

Recession? What recession? Retail sales buck the trend, says expert

by David Jinks MILT
19th Aug 22 12:31 pm

Reports of a fall in consumer confidence this summer may be exaggerated, says the home delivery expert ParcelHero.

Today’s Office for National Statistics (ONS) retail figures for July show an unexpected rise in sales. Brits spent 1.3% more in July than they did in June, and a huge 7.8% more than they did in the same month last year. The value of online sales also grew, up 5.3% against the previous month as shoppers took advantage of online offers.

ParcelHero’s Head of Consumer Research, David Jinks M.I.L.T., says: ‘Not only did the amount Brits spent climb in July, so did the amount of things they bought. Retail sales volumes also climbed by 0.3% in July compared to the month before. So this rise in spending isn’t just down to inflation.’

‘Retailers had been bracing themselves for a gloomy set of retail results in July, but these figures don’t show the predicted disaster. It’s encouraging to see that department store sales volumes rose by 1.4% as Brits prepared for summer vacations.

‘Online sales have had a particularly tough time recently, but a 5.3% rise in the value of e-commerce sales shows we are still happy to splash the cash if there are bargains to be had. The proportion of online sales rose to 26.3% of the entire retail market in July 2022, up from 25.3% in June 2022.

‘Of course, with household bills set to rise steeply and a recession lurking just around the corner, the results weren’t uniformly positive. The BBC points to a -1.2% decline in retail volumes over the last 3 months (May-July) as an indicator that consumer confidence is dented, although over the same period the amount we spent actually grew by 2.3%.

‘The real fly in the ointment is inflation. The ONS’ retail sales values are unadjusted for price changes. So, while it’s true that we bought more and spent more in July, a chunk of that extra spending is the impact of rising prices. The ONS says, looking at the figures overall, there is an implied annual growth in prices of 10.4%.

‘Even so, July’s 0.3% rise in sales volumes don’t show the complete collapse in consumer sentiment that many analysts feared. August’s figures will give us an even clearer picture of whether shoppers are drawing in their horns or continue to enjoy the last of the summer bargains.

‘An omnichannel approach is vital for all retailers looking to make the most of this unexpected rise in spending while it lasts. ParcelHero’s influential report “2030: Death of the High Street” has been discussed in Parliament. It reveals that, unless retailers develop an omnichannel approach, embracing both online and physical store sales, the High Street as we know it will reach a dead-end by 2030.’

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