Deloitte comments on ONS retail sales figures
20 September 2018
Commenting on today’s ONS retail sales figures, Ian Geddes, head of retail at Deloitte, said:
“August’s retail sales values (ex-fuel) saw encouraging year-on-year growth of 4.8%. The month-on-month picture was more muted, however, with sales values and volumes growing 0.6% and 0.3% respectively. This was largely due to slower growth in food sales after the warm weather came to an end. In addition, heavy, extended discounting was unable to attract buyers and stave off a fall in clothing sales.
“It is encouraging to see the strong growth in household goods sales, with consumers mindful of DIY chores in the lead up to the August bank holiday weekend, not to mention the ‘back to school’ factor typically welcomed by retailers at the end of summer.
“Online spending now accounts for 18.2% of all retail spending, a new record. While some may argue that pace of online sales growth may be slowing, it is worth acknowledging that as online and offline converges, it becomes increasingly difficult to measure sales effectively. We regard the slowdown in online sales growth as an indication of the retail industry successfully adopting omnichannel offerings. This is particularly evident in the case of department stores, which have continued to show strong online sales growth this year (26.1%). Department stores have now also achieved a new record proportion of online retailing, at 18.4%.
“Looking ahead, there are a number of potential macroeconomic headwinds that could impact retail sales in the coming months. Rising inflation and squeezed wage growth could dampen spending, while uncertainty and currency volatility could cause headaches for business decision-makers, who will need to do what they can to minimise costs and remain profitable. Overall, however, retailers will be encouraged by the strong year-on-year boost to retail sales – this is consistent with a strengthening in overall consumer spending growth and may help consumer confidence to continue its recovery over the next quarter.”
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