Many of us have tightened our belts & continue to do so, but we are generally feeling more positive about the state of the economy, improving +3% points at the end of last year. No doubt the impact of low levels of unemployment & inflation easing.
It also shows consumers are feeling more positive about their disposable income up 6.5% points. Celine Fenech, consumer insight lead at Deloitte, commented: “…the squeeze on their purchasing power could now be past its peak.”
So, what has this meant for bricks & mortar businesses?
Well it’s good news. In the last 9 trading weeks of 2022, sales in physical stores were up 12.5%. Meanwhile online sales remained flat. The High Street is dead? Think again!
Hotel Chocolat is planning on opening 50 new local UK stores following a bumper Christmas with shop sales up 10%. “Retail is very much back,” said CEO Angus Thirlwell. “When people step into a Hotel Chocolat, there is a sense of discovery, excitement. That sensorial element is not to be understated.”
At Marks and Spencer local stores did well too. Like-for-like food sales were up by 6.3% while clothing & home products enjoyed their greatest market share for 7 years, with sales up by 8.6%. Good enough for a £480m investment in bricks & mortar with 20 new stores opening and 3,400 jobs created in 2023/4. CEO Stuart Machin said local stores were a "key part" of the group's future, alongside online trading.
Then there’s the UK’s largest high street bookseller Waterstones who just posted record profits soaring 1,352% to £42.1m (after tax) in the year to end April 2022 thanks to James Daunt. Shoppers headed straight back to local shops post pandemic & it’s now exceeded pre-Covid sales. We previously talked about Waterstones approach to local retail in our blog.
That’s just the beginning too, as things also looked great in store for a host of other local retailers including Dunelm, Next, Greggs, DFS Group Limited, B&M Retail, Sainsbury's & Tesco as well as many others.
Meanwhile Amazon announced plans to close 3 UK warehouses affecting 1,200 staff, as it cuts costs following over expansion. Amazon CEO Andy Jassy said last week that job cuts were part of plans to weather “uncertain and difficult” economic conditions.
It shouldn't be seen as a competition between on and off-line, it's all sales, but the demise of physical #retail has been somewhat over exaggerated. Blended is indeed best for everyone, especially as we enter a difficult trading period.
Even that's not all bad news. Ian Stewart, chief economist at Deloitte, commented: “This is a very different recession from those of the recent past... by the standards of past recessions this is likely to be a relatively mild one, with a low peak in unemployment & growth resuming towards the end of 2023.”
At We Are Acuity we’ve been working with national brands who sell through local partners whether those are branches, retailers, dealers, franchisees, or affiliates for over 20 years, with our expert team managing local digital advertising campaigns from start to finish.
If you’d like to talk about your brand’s local marketing why not schedule a FREE 30-minute assessment today here? It will be well worth your time.
To read more about Local Marketing have a look at our blog page "Local Thinking': https://www.weareacuity.com/local-thinking-our-blog