‘Non-essential’ stores are essential. Retail sales collapsed -8.2% in January, as the High Street shut up shop once more

This article is brought to you by Retail Technology Review: ‘Non-essential’ stores are essential. Retail sales collapsed -8.2% in January, as the High Street shut up shop once more.

Figures released by the Office for National Statistics (ONS) highlight the ongoing devastation lockdown is having on the High Street. The value of UK retail sales collapsed -7.8% in January compared to the previous month, December 2020, and -7.2% YOY.

The home delivery expert ParcelHero says that the figures show how essential supposedly ‘non-essential’ stores are to the UK economy. It says Lockdown 3 must be the ‘lockdown to end all lockdowns’ to ensure indie stores stand a chance of survival.

ParcelHero’s Head of Consumer Research, David Jinks MILT, says: “The ONS retail figures for January show that the volume of goods bought last month collapsed -8.2% compared to the preceding month, as Lockdown 3 shattered retailers’ hopes that traditional January sales would lead a High Street comeback.

“The amount of goods sold was also down -5.9% compared to January 2020, just before the beginning of Lockdown 1. Clothing stores were the main driver behind this collapse, with monthly declines of -35.6% in the amount spent and -34.7% in the quantity bought.

“These are grim numbers for retailers and, even when this supposed ‘lockdown to end all lockdowns’ is finally over, the High Street will be a very different place.  Topshop, Dorothy Perkins, Burtons, Miss Selfridge and Wallis are among the long rollcall of casualties who won’t be reopening their doors again when the shutters finally go up across Britain.

“It’s no coincidence that these once dominant High Street stores are moving to online only. Once again, online sales helped shore up spending and avoid complete retail meltdown. Online sales hit a record high, seizing over a third of the entire retail spend, ballooning by 72.7% compared to January 2019, with all non-food store sales up 90% YOY and online household goods sales up 110.1% YOY. 

“As big-name High Street fascias disappear, it will be up to indie stores to fill in the gaps and restore the fortunes of our town centres. That’s why it is vital that the Government gets its roadmap for ending lockdown right. 

“Non-essential stores will not survive a fourth lockdown; they need to know this will be the final one. That is the only way they will be able to plan confidently for the future. It’s vital the Prime Minister stands by the pledge he made earlier this week: ‘We want this lockdown to be the last. And we want progress to be cautious but also irreversible’.

“Of course, supposedly ‘non-essential’ indie stores also need to rapidly expand their online offerings, to complement their physical stores. As today’s ONS figures highlight, a strong web presence is crucial for their survival. That’s why online clothing sales managed to grow 48.9% despite the huge slump in fashion sales on the High Street.

“Ironically, a new tax supposedly aimed at saving town centre stores may drive the final nail into their coffins by slashing their online sales. It’s widely believed Chancellor Sunak will reveal details of an ‘Amazon tax’ in his Spring Budget next month. This could add as much as 2% to the cost of all online retail sales. 

“The Chancellor should not make UK’s beleaguered online shoppers and indie stores pay the price for lost business rates income. The new tax would hit shoppers and remaining retailers alike. Those High Street outlets that find ways to survive must have websites as well as physical stores. A new online sales tax will leave most retailers paying a second raft of taxes. 

“In January 2017, ParcelHero released 2030: Death of the High Street, a high-profile report that was discussed in Parliament. We said that, unless retailers developed an omnichannel approach that embraced both online and physical store sales, the High Street as we know it would reach a dead-end by 2030. These latest ONS retail figures show that the coronavirus pandemic has only hastened its demise. 

“Only stores that embrace their website as their most important shop window and ensure their online service matches the standard of their in-store experience will survive.