Shoppers may never return to the high street after lockdown, warns the home delivery firm ParcelHero, as March ONS retail sales results show e-commerce sales rose 12.5% YOY in the wake of the Covid-19 epidemic.
The latest Office of National Statistics (ONS) retail sales estimates for March have confirmed dire forecasts for the future of the High Street. The UK home delivery specialist ParcelHero predicted on 4 March, three weeks before the lockdown, that the coronavirus outbreak would result in online sales snatching a record amount of the overall retail market. ParcelHero claims this will significantly hasten the ongoing demise of the High Street unless drastic steps are taken by retailers.
The latest figures showed a massive -5.7% decline in the overall amount spent by shoppers compared to February, the steepest drop since the ONS started predicting figures. In contrast, online sales rose to grab 22.3% of all sales. ParcelHero’s Head of Consumer Research, David Jinks MILT comments:
“The Covid-19 outbreak will be an extinction level event for the High Street, wiping out many fashion and department store giants, unless brands embrace omnichannel – integrated High Street and online sales - as never before. The value of clothing sales in non-food stores crashed by -35.5% month-on-month, for example. Back in 2016, our report, Death of the High Street, predicted half of the UK’s existing High Street businesses would collapse by 2030. With Animal, Oasis, Warehouse, Laura Ashley, BrightHouse, Cath Kidston and Debenhams all entering administration in recent days, we believe Covid-19 has simply hastened their demise.
“Britain’s big retail brands must truly embrace omnichannel sales, with a completely integrated online and in-store experience, once social distancing measures are relaxed. Otherwise, Britain’s shoppers may simply lose the habit of visiting stores.
“A number of online retailers, particularly in the groceries sector, were woefully ill-prepared for the scale of growth at the beginning of the lockdown. This didn’t make a great impression on people attempting to buy groceries online for the first time. Gradually, however, many stores got their online acts together. The result is that, during March, many new shoppers developed a taste for home food deliveries and for many other products – and the concern is many may never go back.
“Online household goods spending was up 51.8% compared to March 2019, and online department store sales were up 47% compared to this February before lockdown started. In short, e-commerce recorded its highest recorded proportions of overall sales in all retail sectors ever, except non-store retailing, where it bagged a ‘mere’ 82.4 % of the overall market.
“It’s no coincidence that one of the strongest reported retail performances of recent days has been by online-only fashion retailer Boohoo, which has recently added former High Street brands Karen Millen and Coast to its portfolio. Additionally, the announcement yesterday of the Laura Ashley brand’s partial rescue from administration is largely based around a plan to push the brand name online.
“To stand any chance of fighting back, it's vital that remaining town centre stores embrace ideas such as BOPUS – buy online, pick up in store – to tempt footfall back into physical shops. They must also ensure shoppers are rewarded by offering a great experience, with knowledgeable staff and a range of amenities.
“The latest figures are a meteor striking our town centres, and only the most agile and responsive stores, with a clear online strategy, are likely to survive the impact of Covid-19. And it’s not just lumbering, giant brands facing extinction; it’s hard to believe, but there are still many local specialist shops with no online presence whatsoever. March’s sales forecast figures should prove a final wake-up call to them. With Britain’s couriers still picking up from businesses and warehouses nationwide, shipping products directly to customers is just as easy as it ever has been for specialist retailers.”