UK government Office of National Statistics (ONS) data shows a mixed picture for retail sales across the peak retail season of November and December 2024. The peak retail season of November and December every year is important because of the spike in revenues that ultimately affect retailers’ bottom lines. Online retail sales impact the supply chain from middle mile to contract logistics and last mile delivery and consequently will give some insight into how the likes of DHL, Evri and DPD have been doing in the peak season.
December online sales
On a month to month basis, seasonally adjusted UK online sales were up across the board in December. Household goods saw the biggest growth of 12.5%, followed by fashion that grew by 7.2%. This was clearly helped by the Black Friday promotions that fell in this ONS monthly reporting period. Parcel delivery price comparison website Parcelhero’s Head of Consumer Research, David Jinks M.I.L.T. observed that without the seasonal adjustment for Black Friday, “If we take out this seasonal adjustment, sales volumes were actually up 10% over November.”
Compared to December 2023, overall seasonally adjusted online sales were up 1.7% y-o-y. Online retail market share grew by 0.5 basis points from 26.5% in November to 27.0% in December.
November sales down
Where there was a certain amount of growth in online sales in December, seasonally adjusted month-on-month online sales fell 3.1% in November. All segments reported falls in sales, with household goods falling 6.6% in the period and fashion down 5.3% against October 2024.
Given the falls in sales in November followed by growth in December, it seems likely that consumers were holding onto their wallets in November ahead of the Black Friday sales promotions.
Overall retail sales
In December, overall retail sales were up 1.9% y-o-y. Month on month however, they were down 0.3%. Fashion sales grew 4.4% month-on-month, again pointing to a relatively successful Black Friday for retailers in this segment.
Overall seasonally adjusted retail sales were up 0.5% y-o-y to November. Where Black Friday wasn’t a factor in this, state schools’ half term holidays may well have played a part as parents took their children to the shops for something to do. This may well not have included taking them clothes shopping as this segment fell by 2.6% month on month, again pointing to people holding off fashion shopping until the Black Friday sales promotions.
UK economy sees slow growth
Other data points to a softness in the UK economy with a certain lack of consumer confidence feeding into retail sales growth both online and on the High Street. The recent major macroeconomic headwinds of high inflation and interest rates have softened but consumer confidence has not recovered commensurately. The UK is a mature economy and growth will never come close to emerging economies like India and Turkey for example, but even so the data isn’t a reason for celebration.
What does this mean for logistics companies?
While not a bumper year as volumes and revenues go, the peak season hasn’t been disastrous for logistics companies, as can be seen in retail sales volumes. Though a lot of additional resources will have had to be put in play to meet the volume demand, the return on that investment may well have been quite reasonable given the overall results in December. We cannot exactly say how well as yet until logistics companies’ quarterly results start coming in in March. Watch this space!
Author: Richard Shrubb
Source: Ti Insights
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