The end of Covid restrictions was supposed to boost July’s retail sales, but the spreading Delta variant drove anxious shoppers back into their homes. ParcelHero warned last month that two-thirds of shoppers did not want to see such a drastic end to protective measures.
The home delivery expert ParcelHero says it warned the Government as early as 9 July that ‘Freedom Day’ plans to relax Covid measures would backfire. Now the latest Office for National Statistics (ONS) retail sales figures reveal a shocking -2.5% decrease in the amount of goods sold during the month.
A growth in sales of 0.4% had been confidently expected by retail analysts. ParcelHero believes this was reversed by Government and retailers’ failure to listen to shoppers’ fears.
ParcelHero’s Head of Consumer Research, David Jinks M.I.L.T., says: ‘July’s retail sales figures are a train wreck that we saw coming. Over the previous few months, customers had regained confidence about shopping safely in the High Street. All that progress has now been derailed. Ending Covid restrictions as Delta variant cases began to climb was always going to lead to this.
‘Before “Freedom Day”, our research showed that more than two-thirds of consumers (68.5%) wanted mask-wearing and distancing measures retained after 19 July. The Government’s move flew in the face of these findings.
‘We said on the 9 July – ten days before restrictions were lifted – “Of course, everyone yearns for the pandemic to be over. The so-called ‘Freedom Day’ is the opposite of that, however. The end to mask-wearing and queues outside stores will restore the optics of normality, but these are the very measures that will enable the virus to spread faster than ever… It’s a move that could well backfire as consumer confidence tumbles.”
‘Nonetheless, the Government and retailers went ahead and removed most precautions on Freedom Day, causing shoppers to flee the High Street once more. It’s no surprise that after four months of gentle decline, online sales grew again in July. Online sales’ 0.3% growth was the only positive news for retailers in the latest ONS figures, but it came because shoppers voted with their feet and fled the perceived danger of physical stores.
‘The ONS conjectured that people skipped shopping because of England’s run in the Euro 2020 football tournament. However, we believe that Freedom Day was an own goal that ended the High Street’s return to form. If there’s ever a return to the cycle of Covid precautions, we hope that the Government and retailers have learned a valuable lesson.
‘Customers who were successfully lured back to the High Street earlier in the summer now need renewed assurance. We do think it can happen. Our research indicates online’ s current 27.9% share of all retail is a little high and will settle down at 25% over the next few months. But that’s only if retailers successfully integrate safe in-store shopping with online options. To find out why retailers must improve their combined “brick and click” services to survive the pandemic, see ParcelHero’s new study on the High Street of the future at: https://www.parcelhero.com/research/shop-of-the-future