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UK Homewares Sector Report summary

December 2020

Period covered: Period covered: 01 Nov 2020 – 28 Nov 2020

Retail sales rose by 2.3% in November, year-on-year, according to Retail Economics. Total online retail sales rocketed by 79.6% in November, value and non-seasonally adjusted, according to ONS. Shop price inflation dipped by 1.2% in November, excluding fuel, according to ONS. Homewares retail sales increased by 2.5% in November year-on-year, value and non-seasonally adjusted, according to Retail Economics. Average weekly sales for Homewares were £231m in November, according to Retail Economics.

Homewares –Retail Economics Index: November 2020

Homewares sales softened in November from recent strong growth as lockdown store closures hit sales. But compared to deep double-digit declines during the first lockdown (sales plummeted 42.2% in April), the category has proved resilient, supported by retailers better able to adapt to online, as well as consumer resilience to shop early for… read more

Redistribution of spend

National lockdown on 5 November, meant closure of non-essential stores for a second time while people were encouraged to work from home. November’s four-week lockdown exacerbated the uneven impact the pandemic has had on the retail sector, both across categories and channels. News in November that a Covid tier system will last until April stimulated spending to make life indoors more pleasant. Consumers spent on home comforts and entertainment in perpetration for a winter indoors, consequently shunning fashion items.

Shopping early

Consumers also shopped earlier for Christmas this year, pulling forward spending to benefit sales in November. This was helped by Black Friday promotions throughout the entire month. More than half (53%) of shoppers feel they did more Christmas shopping than usual in November according to a Retail Economics consumer survey – with a fifth of those enticed by Black Friday.

Online Household Goods –Office for National Statistics –November 2020

Online Household Goods sales growth rose by 163.7% in November, year-on-year against a 9.4% decline a year earlier which was distorted by the timing of Black Friday. Hence, sales growth outperformed the three-month and 12-month averages of 97.6% and 73.3% respectively. Online sales of Household Goods accounted for 34.9% of total retail sales in November, up from the 15.8% proportion a year ago. The average weekly spend was £309m in November, improving on the £117m average weekly spend in the same month a… read more

Macro Factors – Housing Market Activity

Mortgage approvals accelerated in October to 97,532 up from 92,091 in the previous month and significantly ahead of the previous six-month average of 51,810. This was the sharpest rise in mortgage approvals since September 2007. Mortgage approvals are currently 33% higher than in February 2020 and up by 51% compared to the same month a year ago. The number of re-mortgaging approvals rose marginally on the previous month, totalling 32,851 in October up from 32,773 in September. This was lower than the previous six-month average of 33,980.

Macro Factors – Consumers

Household consumption rose by 18.3% in Q3 2020 on the previous quarter, totalling £294,468m. This follows a 23.6% contraction in the previous quarter. Household consumption remains 12.4% below its Q4 2019 level. GfK’s Consumer Confidence fell by two points to -33 in November, 19 points lower than in the same month a year ago and the lowest reading since May.

Macro Factors –Ipsos Retail Performance

As a result of the government imposing new lockdown restrictions and the closure of non-essential stores in November, IPSOS did not track shopper numbers in November. However, IPSOS forecast overall UK footfall to fall by 55.7% in December 2020 compared to the same month a year ago. The steepest declines in footfall are anticipated to be in Scotland & N Ireland (-69.5%) and Northern England (-61.4%). 

Macro Factors –Labour Market

The latest ONS labour market data shows some recovery in hours worked, despite redundancies hitting a record high as hospitality and physical retail remains under intense pressure from Covid-19 restrictions. The number of paid employees is down some 819,000 in November compared with March 2020 according to flash estimates using PAYE data. However, the largest falls were seen at the start of the coronavirus outbreak. Hospitality has been the hardest hit, with 297,000 fewer payroll workers since the start of the pandemic, followed by… read more

Macro Factors – Earnings

For October in nominal terms (unadjusted for price inflation): Average regular pay (excluding bonuses) for employees in Great Britain was £527 per week before tax and other deductions from pay – up from £509 per week a year earlier. Average total pay (including bonuses) for employees in Great Britain was £560 per week before tax and other deductions from pay.

Macro Factors –Costs, Prices and Margins

Sterling’s trade weighted index rose in November, up 1.1% on the previous month. The index has been impacted by the ongoing uncertainty surrounding Brexit negotiations with a deal between the UK and EU not yet reached. In terms of exchange rates, the £/$ rate is currently around 1.34, while £/€ dipped to around 1.10.  Both commodity indexes we track rose in December. Indeed, the Thomson Reuters CRB Index fell by 10.9% year-on-year from -15.6% in November.

Factory gate inflation rose to -0.8% in November, up from -1.4% in the previous month. On a month-on-month basis, output inflation rose by 0.2%, the sharpest monthly increase since July 2020. Five product groups provided a negative contribution to the annual output inflation rate in November … read more

 

As a direct result of the second lockdown, did you delay your spending on any of the following categories?

Source: Retail Economics

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UK Homewares Sector Report: March 2024

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  • Homewares Market Share - top 10 Homeware retailers
  • Homewares Market Size estimates by category (£m)
  • Sales Growth by category
  • Total Homewares Spending by category (£m)
  • Online Household Goods Sales (y-o-y)
  • Forecasts for 2021-2025
  • Footfall by channel and region
  • Regional Weather data and more…