Deloitte comments on ONS Retail Sales figures
14 December 2017
Commenting on today’s ONS retail sales figures, Ian Geddes, head of retail at Deloitte, said:
“November’s retail sales figures have seen stronger than expected increases in sales values, up 4.7% year on year and 1.4% from the previous month. Food sales values have increased by 3.5% from 2016, but the fact that volumes have fallen by 0.1% may suggest that the growth in values is largely down to rising inflation over the period. Consumers may have been forced to spend more, rather than choosing to do so.
“Boosted by the inclusion of Black Friday, the growth in online retail and e-commerce shows no signs of abating and has once again outperformed overall sales growth. Online sales increased by 10% from last year, and now accounts for 17% of all retail sales in the UK. Electrical household appliances made the largest contribution to November’s sales growth. Crucially, the record-breaking Cyber Monday is not included in today’s figures, and this will give a significant boost to December’s retail sales figures.
“November’s figures show good growth against what was a very strong November 2016. The fact that there has been any growth at all should be commended, particularly in the context of strong headwinds and rising inflation squeezing disposable income. Retailers appear to have acknowledged the pressures faced by consumers and have adapted their business strategies accordingly through planned discounting and promotional campaigns.
“The next ten days of pre-Christmas sales will be crucial for retailers. Trading is likely to peak on Friday 22nd, particularly for purchases of food and drink as consumers prepare for festive hosting. However, profitability is another matter, and margins are under intense pressure.
“The success of the retail industry over Christmas will be measured by assessing the sector’s performance across the final three months of the year. On the surface, today’s figures are promising, but we will have to wait until January before seeing what the true cost of this growth has been. Inevitably, some retailers will do better than others and, given the growing cost pressures facing both the industry and consumers, there is little room for error.”
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