Deloitte comments on ONS Retail Sales figures has been saved
Deloitte comments on ONS Retail Sales figures
16 August 2018
Commenting on today’s ONS retail sales figures, Ian Geddes, head of retail at Deloitte, said:
“July’s retail sales values (ex-fuel) grew 5% year-on-year and 1.2% month-on-month. The year-on-year boost to both volumes and values should reassure the sector. July’s sizzling weather, combined with the England team’s successful run in the World Cup, was welcome news to grocers who saw food sales values increase 5.2% with consumers stocking up on drinks and food for the BBQ, while DIY also saw an increase of 6.5%.
“That being said, high-street footfall was affected by the heatwave, with consumers preferring to stay indoors and shop online rather than braving the high streets. This impacted clothing sales which only saw 1% growth despite the summer sales. Spending online shows no signs of slowing down and grew strongly again to now account for 18.2% of all retail sales – a new record.
“There has been much media coverage focusing on store closures and job losses in the retail sector, but it is important to recognise that these stores are not closing simply because of trading this year. Years of rising costs, technological disruption and changing consumer behaviour has led to a tipping point that has forced the UK high street to undergo considerable structural change.
“Success stories can be found in every sector and the future outlook is promising with evidence of reinvention and investment. One only has to look at the numerous examples of innovation happening within the store: grocers trialling cashless supermarkets, fashion vendors experimenting with concessions and retailers investing in customer experience. The high street is far from dead, it is evolving.
“Looking ahead, retail businesses will need to consider how August’s interest rate rise, combined with a falling pound, may have an impact on consumer’s ability to spend. Consumers are squeezed, and retailers may have to consider absorbing costs in the short term so as to avoid in-store price rises outstripping average wage growth. We expect to continue to see retailers make bold strategic decisions in an attempt to keep customers on side and maximise profitability.”
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