Businesses to increase B2B spend to drive growth
B2B spending it expected to grow at an average of 1.4% in the second quarter, compared to the same period in 2020.
That equates to an additional £5bn in B2B spending from UK businesses, as 70% of companies say they feel more optimistic about their prospects over the next 12 months.
The study by American Express and the Centre for Business and Economic Research (CEBR) shows the UK has been hardest hit by the pandemic’s impact on business revenues. This is compared to Australia, Canada, Japan, Mexico and the US.
But confidence is growing, likely boosted by the UK’s vaccine roll-out and gradual easing of restrictions. This is supported by the latest GDP growth estimates from the CEBR, which predicts UK GDP growth of 7.1% in 2021.
Source: American Express/CEBR
Marketers up spend on email marketing
Email marketing budgets have increased since the onset of the pandemic, with the average proportion of marketing budget spent on email now at 21.3%, the first time it has passed the 20% mark.
Just under half of businesses (45%) spend more than 20% of their marketing budget on email, the highest proportion on record since the DMA began tracking email spend in 2015.
Marketers estimate email’s return on investment to be £38.33 for every £1 spent, up from £29.64 in 2016.
Email is also the most used channel for brands to engage with consumers across the customer journey (72%), followed by social media (66%) and online ads (59%).
Consumers return to smaller, more frequent shops
There are signs people are returning to doing smaller shops rather than one big weekly shop, as basket sizes have fallen for the past three months in a row. The average shop now stands at £22.82, the lowest since March last year.
Overall, take-home grocery sales for the 12 weeks to 16 May fell by 0.4%, but this is compared to the first three months of the pandemic last year when consumers were stocking up and panic buying. When comparing the figure to the same period in 2019, it shows shoppers spent an additional £3.8bn.
Looking at specific supermarkets, Aldi and Lidl both grew ahead of the market and gained market share during the period. Sales have been impacted of late as shoppers switched to online and opted for fewer store visits, but Aldi increased take-home sales by 5.2% over the period, while Lidl’s sales were up by 4.6%.
As a result, Aldi saw its market share rise by 0.4 percentage points to 8.1% and Lidl’s increased by 0.3 percentage points to 6.2%, according to the latest take-home grocery figures from Kantar.
Ocado was the fastest growing supermarket, with sales up 15.4% compared to the same period in 2020. Its market share increased by 0.2 percentage points.
Of the big four supermarkets, Asda was the biggest winner, increasing sales by 1.9% over the period, followed by Sainsbury’s (up 0.7%), Morrisons (0.3%) and Tesco where sales remained flat. All increased market share by 0.1 percentage points.
UK tourism set for slow recovery
UK tourism is expected to be worth half what it was in 2019, as Britain prepares for a slow recovery from the pandemic.
Domestic tourism is likely to be worth £51.4bn in 2021, significantly down from £91.6bn two years ago, according to forecasts by VisitBritain.
Meanwhile spending by foreign tourists is expected to be even worse hit, down from £28.4bn in 2019 to just £6.2bn this year.
These figures have been released ahead of a summit in which VisitBritain and VisitEngland are bringing together UK tourism leaders to discuss the sector’s recovery.
Last year, the UK suffered a £58bn blow to the economy as domestic tourism dropped by about two-thirds on account of Covid restrictions, forcing many to cancel and postpone plans.
But despite the forecast for this year, analysts have suggested demand may well outstrip supply for UK holidays as foreign trips are off the table for many.
Most London firms aim to return to office by September
Three-quarters (74%) of firms are planning to return to their office by September of this year.
More than a half (51%) of the 142 companies surveyed say they will do so by the end of June.
The benefits of working in an office environment were seen as the big pull for a summer return, with 71% of respondents saying that being back among colleagues would lead to better collaboration.
However, 53% say they would be happier going back to the office if they didn’t have to use public transport.
Source: Addison Lee