Gloomy economic news dampens hopes for retail and manufacturing’s return, says ParcelHero
Today’s ONS economic indicators paint a gloomy picture for British businesses selling in the UK and overseas. Over 15% of businesses say demand for their exports has crumbled, while the number of UK retailers currently trading has fallen significantly in the lead-up to the ‘Glorious Twelfth’.
The Government’s latest Office for National Statistics (ONS) economic results make gloomy reading for businesses as England prepares for the reopening of the High Street on Monday.
Home delivery expert ParcelHero says Brexit has created mounting challenges for exporters while, at home, the High Street continues to struggle.
ParcelHero’s Head of Consumer Research, David Jinks M.I.L.T., says that British businesses face a mountain of issues. With Brexit continuing to bite, retailers and manufacturers will be pinning much of their hopes on UK sales and the successful reopening of non-essential stores on Monday, which ParcelHero is dubbing the ‘Glorious Twelfth’.
Says David: ‘UK importers continue to face huge challenges. According to the latest ONS economic figures, in the period 8 March to 20 March, 44.8% of importers complained about the impact of additional paperwork created by Brexit; 38.5% said their costs had risen; 35.7% reported new customs tariffs had created significant challenges and 24.9% said they experienced disruption at UK borders.
‘That’s a sorry picture of the realities of post-Brexit trading, with British exporters’ experiences mirroring this. 15.3% reported reduced demand for their products and services; 38.3% experienced problems because of the additional paperwork created by Brexit; 26.1% experienced rises in transport costs and over 20% reported challenges with increased customs duties.
‘Facing such a grim outlook for overseas sales, many companies will be tempted to pull in their horns and concentrate on UK sales. However, the picture for domestic retailers and manufacturers appears almost equally gloomy. Today’s ONS figures reveal the percentage of UK businesses currently trading did rise gradually from 71% in January to 75% in March, but that’s significantly lower than the 84% of companies that were actively trading in mid-December 2020.
‘The amount Brits spent on their credit cards in the last week of March was only 88% of the pre-Covid (February 2020) average.
‘UK retail footfall for the week ending 3 April was just 51% of the equivalent week back in 2019, in those halcyon pre-Covid days. Only 17% of businesses such as hairdressers and beauty salons were operating in March, and that 17% was because of a lifting of restrictions in Wales during the month. Less than half (46%) of all UK food and accommodation businesses were operating.
‘Whether you look at exports or domestic sales, there’s no doubt the double whammy of Brexit and Covid-19 continues to have a huge impact on British businesses of all sizes. The “Glorious Twelfth” can’t come too soon for retailers.
‘Online sales are booming and are never going to fade back to their pre-pandemic levels, which means that the High Street’s bounce-back could be short-lived. However, more positively, we do foresee a longer-term, sustained improvement in retail sales overall as Britain’s vaccination programme takes effect and consumer optimism rises.
‘Retailers who embrace their websites as their most important shop windows and ensure their online services match the standards of their in-store experience will be more successful as things start to pick up.’
Parcelhero’s report revealing the measures High Street retailers can take to ensure they have a future is available here.