Latest statistics highlight need for retailers to go online
Latest data from the Office for National Statistics show that COVID-19 is accelerating online retail growth, including grocery. Retailers will need to expand their logistics capacity to match rising demand long-term.
Although the monthly value of retail sales in Britain fell by 5.7% in March 2020, as many stores ceased trading from 23 March following government guidance, the value of sales online increased by 8.3%, according to the latest statistics from the Office for National Statistics, which also revealed that overall online retail sales accounted for 22.3% of all retail sales. This compared with 18.6% a year ago.
Apart from textiles, clothing and footwear, every category of online sales rose in March with strong growth recorded by department stores which were up 47.4% on the previous month, household goods were up by 36.9%, and food was also up by almost 18%. The latest statistics show that all sectors reached their highest recorded proportion of total retail sales (except non-store retail).
Online spend for groceries, which has long lagged other sectors in terms on online penetration, also increased to a 5.7% share of total grocery spend. JLL expects the shift online to continue further for the UK. In particular, given the low penetration rate for grocery, JLL believes that there is considerable potential for a sustained uplift in online grocery spending.
Ed Cole, head of UK logistics, JLL , said: “During the COVID-19 lockdown, many consumers will experience the ease and convenience of grocery shopping online, despite the capacity constraints retailers have experienced against the recent surge in demand. As we emerge from the immediate turbulence of COVID-19, we fully expect that this shift to online for grocery and other high demand products will drive a further wave of demand for a range of logistics facilities, including large fulfilment centres, parcel hubs and last mile depots.”
For the UK’s grocery sector, where the omni-channel retailers continue to fulfil orders by predominantly picking from their store networks, JLL believes growing online sales will encourage more demand for dedicated warehouse solutions.
JLL believes that, for non-food retailers, the COVID-19 crisis has underlined the need for virtually all retailers to have an online channel to avoid the risk of a drastic loss of sales in any future crisis that results in store closures or major disruption to store supply chains.
JLL (NYSE: JLL) is a leading professional services firm that specializes in real estate and investment management. JLL shapes the future of real estate for a better world by using the most advanced technology to create rewarding opportunities, amazing spaces and sustainable real estate solutions for our clients, our people and our communities. JLL is a Fortune 500 company with annual revenue of $18.0 billion, operations in over 80 countries and a global workforce of more than 93,000 as of December 31, 2019. JLL is the brand name, and a registered trademark, of Jones Lang LaSalle Incorporated. For further information, visit jll.co.uk.