Grim December for retail but the bounce back has started

The ONS has reported that retail sales volumes fell by 3.7% in December 2021 but were 2.6% higher than their pre-coronavirus (COVID-19) February 2020 levels. This was the largest monthly fall since January 2021 (negative 8.3%) when widespread and extensive restrictions to non-essential retail were in place.

The monthly fall in December 2021 follows monthly growth of 0.8% and 1.0% in October and November 2021.

Erin Parnell, founder of bespoke jeweller, Eternally Cherished, commented: “Let’s just say December was incredibly tough. The level of Christmas sales I would usually see simply didn’t materialise like in previous years.”

Most of the fall in retail sales in December came from non-food stores. In 2021 as a whole, however, the volume of retail sales rose by 5.1%. This is the strongest growth since 2004 (when it was also 5.1%) and was last higher in 2002 (5.7%). It was last higher in 2002 (5.7%).

Ruth Bradford of Bristol-based The Little Black and White Book Project said: “I certainly felt the pain with sales in December over a third down compared to the previous year. All Omnicrom’s fault? I don’t think so. I blame rising inflation, the rising cost of living, uncertainty in the market and consumers watching every penny. Oh and a Government that offers no reassurance.”

Non-food stores sales volumes fell by 7.1% in December 2021 and were 2.3% below their pre-coronavirus (COVID-19) levels of February 2020. There were falls in each sub-sector (department stores, clothing stores, other non-food stores and household stores) following strong sales in November.

Online spending values also fell in December 2021, by 1.8% when compared with November 2021. Despite this fall, the proportion of online sales rose slightly to 26.6% in December 2021, from 26.3% in November. This is substantially higher than the 19.7% in February 2020 before the coronavirus pandemic.

Paul Harfleet, founder of the online fashion retailer, Birds Can Fly, said: “As an online retailer, my sales actually improved in December when the Omicron variant had taken grip, which is a huge relief. As a tiny artist-led business, I do have a capacity to be nimble, though in these times of uncertainty it’s hard to know what the future holds. I’ve been relying on my now dwindling savings and have asked for no Government support. As I look to the immediate future, I’m filled with a mixture of fear, trepidation and just a light sprinkling of hope.”

Bryony Lewis, founder of the Wareham-based online gift website, T & Belle: “After a slow start to the festive season, my sales in December were better than expected. It seems that the biggest challenge facing online small businesses in the current climate is visibility, and if you can crack that, customers are really keen to support independent traders.”
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.

Economic activity and social change analysis of data provided by Springboard reported that in the week to 18 December 2021 overall retail footfall was below “normal” expectations for the time of year, at 81% of the level seen in the equivalent week of 2019. Shopping centres retail footfall for this period was at its lowest relative level since the week beginning 25 July 2021.

Natalie Ward, Managing Director at clothing and sportswear retailer, Latched, said: “My turnover dropped by 30% in December. This is a huge amount for a small retail business and, coupled with VAT bills, it’s no surprise many businesses are starting to struggle significantly with cash flow to keep moving forward. I fear unemployment rates will soon be on the rise as businesses try to find a balance and those that can’t will have to close. Many small business owners are already taking home less than the living minimum wage to keep their business open.”

Retailers such as sports equipment, games and toy stores reported a monthly fall in sales volumes of 8.9% in December 2021 but were 6.7% above their February 2020 levels. Clothing stores and department stores reported a fall of 8.0% and 6.3% over the month and were 7.2% and 10.6% below levels in February 2020.

The volume of household goods stores sales fell by 3.2% in December and were 1.4% below their levels in February 2020.

Barry Whitehouse, owner at Banbury-based art shop, The Artery, said: “December was extremely difficult for us. So much for the seasonal lift. To make matters worse, we are now receiving letters from almost every supplier warning of impending price increases due to rising costs of raw materials, which they are now passing onto us, and which we also have no choice but to pass on to our customers. Slim margins and little buying power from a small indie will only further increase the gap between the online giants who can often afford to buy larger quantities and take the hit of price hikes. In a world where people expect fast, efficient service at the lowest price possible, small indies like us will struggle to meet these expectations, combined with the fact that many products have been unavailable for months. The rate at which inflation is rising is gravely concerning.”

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