NEWS Online shoppers spent -9.5% less this August than last year as inflation and energy bills hit home
New Government figures show the amount of goods we bought in August fell by -1.6% compared to July, and an eye-watering -5.4% against August 2021. ParcelHero warns online spending was hit particularly hard – the amount we spent online plummeted -9.5% compared to last year due to the dramatic rise in the cost of living.
oday’s Office for National Statistics (ONS) retail sales figures for August make grim reading for retailers. They reveal a -1.6% fall in the amount of goods we bought compared to July. The result is even worse compared to the same month last year, down -5.4%.
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The home delivery expert ParcelHero says e-commerce sales were hit particularly hard. The value of online sales plummeted by -9.5% in August compared to the same month the previous year and -3.6% compared to July. ParcelHero’s Head of Consumer Research, David Jinks M.I.L.T., says: ‘These figures are worse than most analysts had predicted, and highlight how much shoppers drew in their horns this summer as shopping and energy bills soared. Not only did the number of items we purchased fall by -1.6% in August compared to July, but the amount
of money we spent tumbled by -1.7%. Most experts had predicted a fall in sales volumes of just 0.5%. ‘Online sales suffered particularly badly as shoppers cut back on all non-essential spending. The amount they spent online fell -3.6% against July and -9.5% against August 2021. Worst hit were online household goods sales, down -9% compared to July and an astonishing -16.3% year on year. ‘The reason for the collapse in spending, both on the High Street and online, is not hard to see. Consumer spending was actually up by 5.4% overall compared to August 2021, but the amount of goods we bought was a dark mirror image, down by -5.4%. To put it starkly, we spent more to buy less.
‘Looking back, August was actually a model of stability compared to the upheavals of this month. Consumer
confidence is highly unlikely to grow significantly in the short term. The new Chancellor, Kwasi Kwarteng, is due to reveal a mini budget next Friday (23 September) that is expected to include new tax cuts and more details on energy caps. Retailers will be hoping this will restore confidence but the jury is out on whether consumers will think tax cuts are the answer to our problems. ‘An omnichannel approach is vital for all retailers looking to make the most of this unexpected rise in spending while it lasts. ParcelHero’s influential report “2030: Death of the High Street” has been discussed in Parliament. It reveals that, unless retailers develop an omnichannel approach, embracing both online and physical store sales, the High Street as we know it will reach a dead-end by 2030.
New digital right to work checks for British manufacturing and engineering workers from 1 October 2022
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anufacturing and engineering businesses will from 1 October 2022 need to adopt new digital right to work checks for British and Irish nationals or revert to cumbersome manual in-person checks.
It will, says global mobility and immigration advisers Vialto Partners, no longer be possible for the sector to rely on the virtual checks introduced by the Home Office under its ‘Covid-19 adjusted right to work checks’ concession. Digital right to work checks will, says Stephen Hall, a Senior Manager at Vialto Partners, speed up those checks, making them less cumbersome for employers and less disruptive for employees, particularly for businesses with large and multi-sited workforces. Right to work checks are a requirement for all UK employers who must ensure individuals they wish to employ have a legal right to work. Employers face a fine of up to £20,000 for each employee if they are found to be working in the UK illegally. Right to work checks are required for all British and Irish nationals as well as EEA and Non-EEA nationals.
The Home Office wishes businesses to conduct right to work checks for British and Irish nationals via an authorised Identification Service Provider with accredited Identification Documentation Verification Technology, although it will not be essential. Stephen said: “Right to work checks exist to reduce the risk of employers employing staff that do not have the right to work in the UK. Traditionally, they would be conducted in person with an employer or HR adviser checking a passport or identity card.
“The Home Office had intended to move to online right to work checks in April this year but pushed back following delays in certifying technology providers. From 1 October, right to checks for British and Irish nationals must be done using Identification Validation Technology or they must revert back to the cumbersome process of manually checking and certifying original documents in person. “The Government would like employers to use a certified Identification Service Provider, saying it takes reassurance from the certification process and that employers should too. It will not, however, be essential.
“Employers have a short window of time to adopt this new regime, and those that get it wrong can be fined £20,000 for each illegal worker and lose their ability to sponsor overseas workers.”
Vialto Partners has introduced its own AI-powered Identification Documentation Verification Technology that can quickly and efficiently read and verify identification documents together with ‘selfies’ of individuals.
Spiralling Costs Prompt 40,000 UK SMEs to Seek Finance
he current challenges around rising costs are expected to prompt more than 40,000 SMEs1 to lean on finance providers to help support their businesses according to new research from solution-led fintech lender Nucleus Commercial Finance (NCF). The study found that 15% of small and medium sized UK businesses expect to need a loan to support the running of their business. While just 1% of sole traders expect to have to go down this route, it rose notably to 16% among smaller businesses, employing between 50-249 staff.
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Having weathered the Covid storm, business uncertainty is back. Two thirds (66%) of UK SMEs are worried about the prospect of rising business costs over the next 12 months. Among small and medium sized businesses, this figure rises to 74%, with 29% of this group stating that they are very worried about costs going up over the next year.
For those businesses that find themselves in an uncertain financial position, being able to get access to funding is crucial. However, just 38% of businesses say they are confident about being able to access affordable finance in the next 12 months should they need it.
The findings also reveal that confidence levels increase in line with business size. Almost three in five (57%) of medium sized businesses are confident that they could secure affordable finance, compared to less than a quarter (22%) of sole traders. Chirag Shah, Founder and CEO of Nucleus Commercial Finance commented: “UK SMEs have been through the ringer over the past couple of years. Covid pushed many to the brink and just as they are getting back on their feet, their costs are rising exponentially. With no energy price cap for businesses and the prospect of blackouts over winter, the year ahead could prove to be one of the toughest.
“But businesses are not on their own. Having gone through the challenges of Covid, finance providers and government must work together to ensure that those lessons are learnt to deliver the necessary support. Doing so means that the UK’s battle-hardened SMEs can lead the recovery on the other side.”
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