Shoppers are falling out of love with online shopping

Maybe the Office for National Statistics should stop seasonally adjusting its data. That is the lesson from today’s retail sales figures, which show a strong rebound in sales volumes of 3.4 per cent in January. All areas of spending were up except clothing, which was down by 1.4 per cent.

The overall figures might sound promising, but all they really do is to cancel out December’s fall of 3.3 per cent. Look at the figures for the past three months and sales are pretty flat, falling by 0.2 per cent in that time. The high street is in a stupor, just like the economy as a whole.

Why did retail appear to fall into a deep hole in December? The answer lies in the seasonal adjustment. December is a month when we are expected to spend with abandon as we buy Christmas presents and stock up on food for the festive season. Seasonal adjustment, therefore, will act to revise downwards what we actually spent in December, and then revise upwards what we actually spent in January, so as to smooth out the figures.

But what if we don’t go on quite such a spending spree in December? What if we buy a few more of our Christmas presents in November, taking advantage of Black Friday deals, and left a little more of our personal shopping to January? Then seasonal adjustment will give us what we have had this year: an apparent dip in sales in December followed by a rebound in January.

It is hard not to conclude that Christmas simply is no longer quite as important to the British public as the statisticians seem to think it is – in which case they need to start thinking about revising their method of seasonal adjustment. Or why not just give us the raw, unadjusted figures and leave us to work out what is going on?

One thing which does come out of this month’s figures, however, is a remarkable fall in the amount of money spent on online retail. Online clothing sales were down 15 per cent and online sales of household goods down 13 per cent. We seem to be losing our taste for shopping online and going back to shopping on the high street instead. Why? These figures might be looked at in conjunction with figures last month from the British Retail Consortium (BRC) which showed that use of cash had rebounded for the first time in a decade, up from 15 per cent of all sales in 2021 to 19 per cent in 2022. As the BRC suggests, this may well have something to do with people wanting to budget more carefully. It is easier to lose track of what you are spending when you are buying stuff with a card than it is when you have to break into cash.

It seems as if some shoppers may be keeping a closer eye on their spending by rebelling against online retail as well as against contactless cards. Either way, the pandemic trend towards more online retail appears to be in reverse.