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transport and storage industry closures. This supports our view that many of the courier start-ups that crested the wave of demand during the pandemic have now hit problems. These closures are the fl ip-side of the
signifi cant growth in the sector in 2020 and 2021. In Q1 2020, 8,160 new delivery start-ups opened and, in the same period in 2021, 10,680. These were often smaller SMEs, employing an average of 2.1 people. Now the peak in demand has diminished, many of these new companies have struggled to maintain volumes. In many ways, though the sheer number of
failures is surprising, the underlining reasons are not. It’s no coincidence that Amazon has just announced its fi rst quarterly loss since 2015.
In March this year, online orders fell
-21.8%, compared to the same month in 2021. Online sales, the majority of which are home deliveries, now account for around 26% of the retail market, rather than the 37% they held at the peak of Covid restrictions last year. That means many freight and parcel companies are having to restructure their operations. Some have clearly been unable to do so in time. Those freight transport companies whose main custom was with cross-Channel EU contracts have also been hit by new Brexit regulations, which kicked in at the beginning of 2021. Trade with the EU, especially for SME businesses and their logistics partners, has collapsed, mostly because of new red tape and complicated taxes and “proof of origin” regulations. While these numbers make bleak reading
for the logistics sector, retail has fared little better. 10,055 retail businesses closed in the fi rst quarter of 2022, compared to 8,770 in the same period of 2021 – a 15% increase. Most tellingly, there has also been a
signifi cant fall in the number of new retail businesses opening. In Q1 of 2021, 14,670 new retail businesses were created, as people looked forward with optimism to the eventual end of the pandemic. However, new consumer woes, such as rising energy bills and hikes in food prices, meant only 9,710 new retail ventures opened in January to March this year – a fall of -34%. Longer term, UK retailers must align their
High Street and online sales to counteract a likely further fall in consumer confi dence
May 2022
Most tellingly, there has also been a signifi cant fall in the number of new retail businesses opening. In Q1 of 2021, 14,670 new retail businesses were created, as people looked forward with optimism to the eventual end of the pandemic. However, new consumer woes, such as rising energy bills and hikes in food prices, meant only 9,710 new retail ventures opened in January to March this year – a fall of -34%
www.CCRMagazine.com In Focus
in the months ahead, while their logistics partners need to be more agile in responding to changing customer requirements. It is not all bad news, however. Before the
pandemic, online took around 18% of all retail trade. It is likely that e-commerce will hold on to its current 26% share so, in many ways, this has still been a positive period for the parcels sector.
A combined “brick and click” approach is
increasingly essential for retailers and their delivery partners. Our 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. CCR
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