UK Electricals Sector Report summary
March 2024
Period covered: Period covered: 28 January – 24 February 2024
3 minute read
Note: This report summary is one or two months behind the current month as standard reporting practice. The content is indicative only and incomplete with certain data undisclosed. Become a member to access this data or take out a free 30 day membership trial now.
Electricals sales
Electricals sales fell by xx YoY in February, according to the Retail Economics Retail Sales Index (value, non-seasonally adjusted) against a xx decline a year ago – the best result since xxx xxx.
Non-food more widely remained in decline with health and beauty the only category to record a rise.
Spending on electricals remains low on consumers’ priority lists, amid ongoing structural challenges and longer replacement cycles.
Improving economic backdrop
But there’s reasons to be optimistic with headline inflation falling back to 3.4% YoY in February – better than the forecast drop and the lowest rate in xxx xxx. Inflation is now expected to return to its target rate as early as xxx.
This is being driven by slowing food inflation which hit a two-year low in February and easing energy bills. Ofgem announced a cut to the energy price cap at the end of February, with a typical household energy bill set to fall by £xx to £xx per year from xxx
Easing inflation and elevated wage growth is boosting household budgets.
There’s also growing optimism that an interest rate cut is on the horizon after the governor of the Bank of England Andrew Bailey gave his strongest signal yet of an imminent interest rate cut, potentially as early as xxx.
In a recent interview with the Financial Times, the Bank chief suggested that markets are right to expect more than one interest rate cut this year, with inflation heading towards target.
Omnichannel behaviours
The Electricals sector stands out for its digital-first customer journeys, with 75% of purchases beginning online and 66% concluding there, marking it as the most digitally-oriented sector.
Consumers increasingly navigate between physical and digital retail spaces, with the Electricals sector leading in digital engagement among various industries.
Success in the Electricals market hinges on providing seamless omnichannel experiences that cater to consumer demands, whether shopping online or in-store.
Research indicates a notable divide in consumer behaviour within the Electricals sector, with a significant portion of online sales influenced by physical touchpoints, underscoring the importance of an integrated retail approach.
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Strong relationship between house prices and consumer willingness to spend
Source: ONS
