A couple of suveys have confirmed that online sales surged during the lockdown in the U.K. but unfortunately footwear did not profit from the rising tide. The situation is also changing consumers’ behaviors to the detriment of clothing.
Online retail sales rose by 23.8 percent year-on-year during the month of April in the U.K., reaching a 10-year high, according to the IMRG Capgemini Online Retail Index.
Thanks to unusually hot weather and a nationwide lockdown to combat the Covid-19 pandemic, online sales of gardening items rose by 288 percent, while electrical sales grew by 102 percent due to remote working and demand for at-home entertainment. In the meantime, sales of footwear fell by a sobering 31.1 percent. Overall, the decline for the clothing segment sank to 23.8 percent.
Andy Mulcahy, strategy and insight director at the online retail association IMRG pointed out that ”demand just isn’t there at the moment” for clothing. He added that clothing retailers could face a very difficult period when they reopen and demand is still flagging while costs rise as staff is taken out of furlough.
Lucy Gibbs, managing consultant for retail insight at the technology consultancy Capgemini, noted that the pandemic has reshaped consumer spending patterns and shopping habits. People have become accustomed to turning to online to fulfil shopping needs and that the fashion sector is still losing out as customers are purchasing other goods.
Overall, mid-market retailers are losing ground to budget retailers, as consumers seek value for money in times of uncertainty. However, consumers are also likely to look for brand they trust and of quality. ”This can result in a squeeze in the mid-tier where appealing to both needs has been traditionally harder to balance,” Gibbs explained.
Meanwhile, a survey by the British Retail Consortium (BRC) showed that total retail sales decreased by 19.1 percent year-on-year in April. It is the worst decline recorded since BRC’s index began in January 1995. Helen Dickinson, chief executive of BRC, stressed that for many non-food goods, such as clothing, footwear and large household items, the decline was particularly steep.
Comparable sales grew by 5.7 percent. But the figure excludes temporarily closed stores and therefore the figure is primarily driven by online sales. Online non-food sales increased by 57.9 percent in April but the surge was driven by games consoles, bicycles, office equipment, and haberdashery.
Dickinson added that the pandemic has accelerated many of the trends seen prior to the outbreak and it is likely that as the lockdown wears on, these new shopping habits, such as the trend towards online purchases, will become more entrenched for many consumers.
She indicated that retailers have a lifeline through various government loans and support, but need to know if this will continue beyond the current deadlines. Government should also step in with support for rents as otherwise businesses may be forced to close, she warned.