Deloitte comments on ONS retail sales figures

Commenting on today’s ONS retail sales figures, Ian Geddes, head of retail at Deloitte, said:

“November’s retail sales values (ex-fuel) grew 1.4% from October and were 4.4% up from the previous year. Driven by what is clearly a shift to online, November was a better-than-expected month for the UK retail sector.

“Significantly, a digital milestone has been met for UK retail. For the first time, more than a fifth of all retailing in November was conducted online: 21.5%. Boosted by promotional activity in the run up to Black Friday, average weekly online spending in November was £1.8bn, a whopping 13.1% increase from November 2017. This figure is all the more impressive when considering that sales from the day after Black Friday onwards, including Cyber Monday, were not included.

“Notwithstanding November’s positive sales figures, it’s hard to recall a Christmas environment that has been as competitive as the current market, and a number of established consumer brands are struggling to cope. The combination of less footfall on the high street, a seismic shift towards online sales and heavy discounting during the Black Friday period has been the root cause for many of the profit warnings that have been announced of late.

“How December’s retail sales will fare remains to be seen. With less than a week to go until Christmas, including what will be a crucial weekend for last-minute shopping, retailers have everything to play for. The pressure to shift unwanted stock will make Boxing Day the biggest day of the year for UK retail, and capitalising on this will be key. We are expecting average discounting of at least 52% off from Boxing Day and, while this may help boost December’s sales volumes, profitability will obviously be impacted and could lead to further store closures.

“As we head towards the New Year, weakening consumer demand and rising cost pressures will continue to be core challenges for retailers, not to mention the uncertainty around Brexit which could impact business and consumer confidence.”

End

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