Shoppers spent more to buy less in March, as inflation and fuel costs soared, says ParcelHero
Today’s Office for National Statistics (ONS) retail sales figures for March make grim reading, says the home delivery expert ParcelHero. Retail sales tumbled -1.4% in volume against February’s figures, with fuel sales down -3.8% and food sales down -1.1% as price rises hit. Despite the amount of goods we bought falling month on month, and rising just 0.9% against March 2021, shoppers spent 10.2% more than in March 2021, highlighting the impact of rising costs on staple foods and fuel.
‘One figure in particular highlights this collapse in e-commerce. The spending on online department store sites, which largely sell non-essential items, fell back -36.1% in March compared to March 2021. That means we all cut back on what retailers call “discretionary spending,” optional purchases such as new watches, games consoles and jewellery.
‘The last two years have shown us the economy needs thriving online sales to maintain consumer confidence. The Chancellor must now abandon his plans for a new online sales tax, in the light of this collapse in online spending. Online sellers are feeling the impact of increased household energy bills and rising inflation just as much, if not more, than High Street retailers.
‘Perhaps the most concerning results for both “brick and mortar” and online retailers are the three month figures. Compared with the same period a year earlier, sales volumes over the last three months (January to March) rose by 5.4% but sales values rose by a huge 13.8%, reflecting an implied growth in prices of 8.4%. Whether shoppers buy online or in store, they are facing rising prices and pulling in their horns.
‘Longer term, UK retailers must align their High Street and online sales to counteract a likely further fall in consumer confidence in the months ahead. 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.