Deloitte comments on ONS retail sales has been saved
Deloitte comments on ONS retail sales
18 February 2022
Commenting on today’s ONS retail sales figures, James McDonald, retail partner at Deloitte, said:
Retailers avoid January blues
“Retailers avoided the January blues as consumers made use of end-of-season discounting. Both sales values and volumes recovered from December’s subdued performance, increasing by 2.0% and 1.9%, respectively. Year-on-year, values 6.5% and volumes 9.1% are also up, albeit this is not a like-for-like comparison with the UK under strict lockdown restrictions in January 2021, with all but essential stores closed.
“Today’s figures form the initial sketches of a more positive picture for retail recovery in 2022. Despite worries about inflation, consumers continued to spend. The loosening of restrictions has resulted in more consumers heading to the high street and boosting overall in-store footfall.
“Improved stock levels for large ticket items and a strong housing market boosted spending for the home, as non-food sales volumes grew by 3.4% compared to December. Whilst January food sales volumes slowed in contrast, falling 2.3% month-on-month, this is likely a result of more consumers rebalancing their shopping trolleys from December’s festivities. This also marks a return to pre-pandemic levels.
Cost of living headwinds
“The rising cost of living is firmly front of mind. 29% of UK consumers expect their personal expenditure to go up in the first quarter of 2022 due to rising inflation, and more expensive utility and grocery bills.
“The question is whether retailers will absorb growing costs or pass this on to the consumer, adding further strain to consumer pockets and impacting the industry’s speed of recovery. Finding ways to continue to entice consumers to spend in-store or online will be key to a sustained recovery for the retail industry. To aid this, many retailers are exploring new digital ways of engaging with consumers both online and in-store.
“This could prove pivotal in the months ahead as those consumers who are in a position to spend head out as the economy continues to open up.”
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