ParcelHero: reports of the death of online sales this Christmas were premature, if not plain wrong

ParcelHero: reports of the death of online sales this Christmas were premature, if not plain wrong

New data from the Government’s Office for National Statistics (ONS) reveals that Brits spent significantly more than they planned this Christmas, and that consumer spending has held up well this winter, says the home delivery expert ParcelHero.

ParcelHero’s Head of Consumer Research, David Jinks M.I.L.T., says: ‘It seems that now is not the winter of our discontent. It looks as if consumer spending this winter has been just as robust as it was both pre-pandemic and before the sharp rise in inflation and household energy bills. Shoppers may have said that they were going to spend less but, in fact, they ended up spending around the same amount as in previous winters.

“This report dispels some of the myths that have already formed around this year’s Christmas trading. It finds no evidence we abandoned upmarket supermarkets for discount stores. It also reveals that postal strikes had little impact on online sales; High Street sales didn’t peak until 22 December, following the pattern of previous years.

“Contrary to previous claims, the rail strikes also had little impact on High Street spending. Likewise, there was virtually no sales boom or bust around the World Cup, despite many stores’ expectations or fears. Again, contrary to earlier reports, spending was higher on Black Friday and Boxing Day this winter compared to last. Finally, there was good news for the UK’s beleaguered fashion stores. Clothing and footwear sales, both in-store and online, were significantly stronger than many retailers had feared.

“Why are these latest results significantly better than many retailers and analysts had been expecting? Firstly, it looks like shoppers didn’t stick to their spending resolutions! In early December, 60% of shoppers told the ONS that they planned to cut back on the amount of money they spent over Christmas, compared with the previous year. 79% of shoppers said they would buy fewer presents and 73% said they would be buying less expensive presents. In reality, card spending figures from Revolut (the main source of data for the ONS report) suggest that consumer spending was more resilient than expected, despite the negative pre-Christmas sentiment.

“Recent reports have suggested that, faced with rocketing prices, many shoppers ditched upmarket supermarkets for cheaper chains this winter. Despite a 16.8% rise in the price of food and non-alcoholic beverages in the year to January 2023, the report reveals there was only a small degree of “trading down” by shopping at less expensive supermarkets. Confirming separate data from the Bank of England, it looks as if shoppers preferred swapping to lower price goods within the same supermarket. This tallies with separate data from Kantar, which reveals there was only a small change in market share benefitting the budget supermarkets. Previously, 62% of shoppers claimed they would be buying less expensive food and drink.

“Finally, reports of the death of online sales this Christmas were premature, if not plain wrong. Industrial action in the traditional postal sector led to unexpected pressures on the leading couriers, as consumers and stores scrabbled to find alternative services. With one of the strikes timed for Black Friday itself (25 November) consumers were expected to do more of their Christmas shopping on the High Street. It appears this wasn’t the case, as in-store spending remained flat between 25 November and 18 December.

“Shoppers only rushed into shops and significantly increased their in-store spending on 22 December. At this point, as ParcelHero continually reminds everyone, deliveries in time for Christmas Day always become either more expensive or riskier.

“So, is this ONS report the last word on Christmas 2022? One word of warning before we take its findings as gospel: the data was obtained in collaboration with Revolut. Revolut is a newer source of spending data, and its users are typically younger and more metropolitan than the population as a whole. Therefore, its data is not necessarily representative of overall UK consumer spending trends.”

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