The Office of National Statistics (ONS) most recent data revealed that retail sales dropped by 0.1% in June 2022 following a fall of 0.8% in May 2022 despite bank holiday weekends and the hope that the Queen’s Platinum Jubilee would boost sales.
Many retailers may have expected to have received a stronger sales boost than what they experienced last month. For example, one of the most recent nationwide celebrations comparable with the Queen’s Platinum Jubilee was Prince Harry and Meghan’s royal wedding on 19 May 2018. The ONS reported that the year-on-year growth rate for the quantity bought was relatively stable each month from January to April 2018, remaining under 2%. However, in May, retailers saw stronger growth at 3.9%; a sharp year-on-year increase when compared with April 2018 at 1.4%.
Feedback from retailers suggested that a sustained period of good weather, reported by the Met Office as the second warmest May since 1910, and the Royal Wedding celebrations encouraged Brits to spend their money in food and household goods stores in May 2018.
In addition, just prior to the cost of living crisis, the previous bank holiday weekend of Good Friday 2022 also helped retail sales volumes rise by 1.4% in April 2022 following a fall of 1.2% in March 2022.
The data revealed that non-store retailing (online retailers) contributed most to the growth in the quantity bought at 0.5% points in 2018. In comparison with the most recent data, it revealed non-store retailing sales volumes fell by 3.7% in June 2022 despite the nationwide celebration.
Additionally, the Good Friday bank holiday saw non-store retailing sales volumes instead increase by 3.7% in April 2022. Breakdown of the data from online retailers indicated that the increase was mainly because of strong clothing sales – again something that was not replicated by the Platinum Jubilee as shoppers held back on parting with their discretionary income.
Supermarkets and food retailers experienced the lion-share of consumers spending during the Platinum Jubilee as they saw sales volumes spike by 3.1%, with retailers confirming that increased sales were because of the country’s celebrations.
As the cost of living crisis grows out of hand, with the energy price cap now expected to double in January 2023 according to utility consultancy BFY Group and the Christmas trading period edges closer, it poses the question, what does it mean for the upcoming golden quarter for retailers?
Many often hang their hats on strong performances during the months of October to December – which typically has the highest level of sales due to the holiday shopping season – to help boost their cash reserves for the more traditionally frugal start of the year as consumers cut back on spending. If the performance of Platinum Jubilee Weekend is a truthful barometer of consumers’ spending habits in the face of rising inflation, aside from the traditional supermarkets, it seems they could be set to face an even more challenging period ahead.