UK retail sales defy economic gloom, Parcelhero reports
Contrary to analysts’ and consumers’ predictions, UK retail spending increased slightly in February, according to data from the Office for National Statistics (ONS).
Home delivery expert Parcelhero reports a 1% increase in sales volumes compared to January, indicating a resilient consumer base despite economic uncertainties.
And while there have been widespread concerns about a spending downturn, driven by low consumer confidence and planned cutbacks, both high street and online sales saw growth in February. Household goods stores, particularly hardware retailers, experienced a 6.8% sales volume increase, suggesting a surge in DIY and spring cleaning activities. Luxury items, such as watches and jewellery, also saw strong sales, defying predictions of reduced big-ticket purchases.
Online sales mirrored this positive trend, with both volume and spending rising by 3.3% compared to January. Year-on-year, online spending increased by 3.9%, suggesting growing consumer confidence compared to the previous year. Consequently, online sales’ share of total retail spending rose to 26.5%.
Parcelhero’s Head of Consumer Research, David Jinks, highlighted the unexpected resilience of UK shoppers. However, he cautioned that March and April figures will be crucial, as new National Insurance and minimum wage increases may impact consumer spending.
Jinks also pointed to a conflicting trend: while consumer confidence remains low, a recent KPMG survey shows the majority (55%) of shoppers feel financially secure (that’s just 2% lower than the previous quarter). Jinks emphasized the importance of an omnichannel approach for retailers, combining online and physical store presence, to navigate the evolving retail landscape.
Commenting on the latest ONS figures, David Morrison, Senior Market Analyst at FCA-regulated fintech and financial services provider, Trade Nation added:
“The rise in Retail Sales was unexpected, as the consensus forecast was for a month-on-month decline of 0.3% following January’s strong reading. It was interesting to note the increased demand for gold. Gold has surged to record highs and is closing in on $3,100 an ounce. It started this year at $2,600.”
