With Bank of England interest rates rising, along with the cost of fuel and everyday living, UK citizens are finding their income is being stretched. This is reflected in figures published by the Office of National Statistics (ONS) that show that high street shopping habits are being mirrored in the online world, with sales falling 1.7% in May of 2022.
The impact of the current cost of living crisis is most apparent when compared to 2021, which saw sales 7.9% higher than they are now. The chief driver in this equation is inflation, which has accelerated significantly in recent months. With people finding it hard to make ends meet and buy basic essentials, it’s changing how people are spending.
Consumer Demand Being Squeezed
Speaking about this latest update on online consumer spending, British Retail Consortium (BRC) chief executive Helen Dickinson had this to say.
“Households reined in spending as the cost-of-living crunch continued to squeeze consumer demand. Many customers are buying down, particularly with food, choosing value range items where they might previously have bought premium goods.
Higher operational and input costs have filtered through to prices, meaning both retailers and their customers are in for hard times ahead. Retailers are doing what they can to support households by absorbing as much of the costs as possible.
They’re expanding their value ranges, offering discounts for some vulnerable groups, and investing in their own supply chains to reduce future costs. If costs continue to spiral, the Government will need to be ready to support struggling households.”
93% Say Basic Food Shopping Costs are Key Driver
As part of the ONS study, people were surveyed as to the influencing factors that are changing spending their habits. A staggering 93% of respondents told the ONS that the reason why they are spending more online is not for luxury goods, but due to the increased cost of basic foods.
Despite the overall drop, the average amount being spent per purchase rose by 0.6% during the same period. However, this increase is due to the purchase of everyday items. The price of food essentials is something that affects everyone and people are cutting back on them.
Delivery firm Parcelhero’s Head of Consumer Research, David Jinks echoed this fact, stating:
“Consumers are cutting back on all non-essential spending, not just food shopping. Despite this fall, online shopping retained 26.6% of the overall retail market, considerably more than the 19.7% it achieved in February 2020, before the pandemic changed shopping habits forever”
Longer-term, UK retailers must align their High Street and online sales to counteract a likely further fall in consumer confidence in the months ahead.”
Challenging Times Ahead for Consumers & Hauliers Alike
Much has happened in the retail world in recent years. Brexit, HGV driver shortages, supply chain issues and now inflation are putting pressure on consumers and the decisions they make. This latest announcement simply serves to show that the UK logistics industry’s journey back to health is far from being a simple one, with many challenges needing to be overcome.
At HGVC, we will continue to do our part in addressing the ongoing HGV driver shortage with our industry-leading, scalable, HGV licence acquisition programs. To find out more about us, please take a few minutes to browse our website, which contains everything you need to know.
Alternatively, to talk with us directly, either click ‘contact us’ or call us on 0330 818 8888, and we’ll be more than happy to discuss your training needs.
