December retail sales: Omicron’s arrival rudely interrupted high street recovery
Retail sales volumes fell by 3.7% in December 2021. Non-food stores sales volumes fell by 7.1% in December 2021,;as the Omicron variant had an impact on retail footfall. Automotive fuel sales volumes fell by 4.7% in December 2021 as increased home working in December 2021 reduced travel. Food store sales volumes fell by 1.0% in December 2021; despite the fall in December, volumes were 2.0% above levels in February 2020. The proportion of retail sales online rose slightly to 26.6% in December 2021 from 26.3% in November, substantially higher than the 19.7% in February 2020 before the coronavirus pandemic.
The ONS has released the latest retail sales snapshot for the UK Retail sales, Great Britain – Office for National Statistics (ons.gov.uk)
The ONS has released data on footfall and the cost of living squeeze
https://www.ons.gov.uk/economy/economicoutputandproductivity/output/bulletins/economicactivityandsocialchangeintheukrealtimeindicators/20january2022
The ONS released data on social intentions in December* Coronavirus and social impacts release
Susannah Streeter, senior investment and markets analyst, Hargreaves Lansdown, said: ’Omicron’s ominous arrival in December rudely interrupted the retail recovery party for high street stores. As more shoppers stayed away, hunkering down for more muted celebrations at home, tills were quieter and volumes lower, offering very little Christmas cheer for retailers. Department stores, fashion chains, toy retailers and other non-food stores saw sales plummet, by 7.1% overall. Searching for the latest styles fell out of fashion as events were cancelled and fear of catching the virus spread. But given that shoppers had already been out in force in October and November ticking off gifts from Christmas lists, fewer people it seemed had to make that last minute dash to the shops.
That stint of early Christmas shopping may be why many of us didn’t swap browsing the aisles to filling virtual baskets instead. The amount spent online fell in December by 1.8% when compared with November and was down 8.3% compared to last year when lockdowns spread across the UK. Online department stores the value of sales were down by a third compare to December 2021, with shoppers also likely to have splashed out earlier on expensive presents to ensure they would arrive in time due to supply issues.
Grocers were more resilient as they scooped up customers who’d cancelled restaurant and bar bookings for a festive blow out at home, but it was far from a supermarket sweep with volumes down by 1%. Christmas markets were also casualties of the spread of the variant, with people clearly anxious to avoid crowded spaces. Only 1 in 7 people saying they intended to visit one in mid-December, compared to more than 1 in 5 earlier in the month according to other data from the ONS**. With fresh guidance to work from home, the commute was again ditched leading to fewer queues at petrol forecourts as drivers had fewer reasons to fill up. Automotive fuel sales volumes fell by 4.7% in December 2021 with sales volumes were 6.6% below their February 2020 levels.
Although the latest ONS data* shows footfall rising again in the week ending 15th of January, it was only by a meagre 2%, and followed three consecutive weeks of falls. Overall retail footfall remains 79% below 2019 levels.
Even as plan B restrictions lift, the number of shoppers is unlikely to snap back to pre-pandemic times in high streets and city centre locations given that hybrid working is fast becoming the norm and household budgets are tightening.
Already two thirds of adults are reporting the cost of living has increased over the past four weeks, and with more energy price rises on the way there are likely to be far fewer shoppers merrily splashing the cash in the months to come.
Spending on delayable purchases like furniture or homewares is likely to be hit, while value chains offering cut price fashions should be able to keep custom brisk as long as they aren’t forced to pass on rising costs to consumers in the form of steeper price tags. Brands offering iconic products should also prove more resilient. Such is the draw of coveted branded items like smart watches, trainers and handbags, fans are more likely to swallow consistent price rises. Luxury customers tend not to be as swayed by economic turbulence and income squeezes, including when money in the bank is losing its value at a faster rate than normal. ‘’
