Deloitte comments on ONS retail sales figures has been saved
Deloitte comments on ONS retail sales figures
18 September 2020
Commenting on today’s ONS retail sales figures, Ian Geddes, head of retail at Deloitte, said:
“Retail sales have continued to stabilise in August with sales values up 0.7% and volumes up 0.8% from July. Understandably, grocers have had a tougher month, with more midweek meals taking place in restaurants rather than at home; online food sales fell 4.6% month-on-month following the launch of the Eat Out to Help Out scheme. Postponed and cancelled holidays may have diverted consumer spending power to home improvements and overall spending may have also benefitted from the ‘back to school’ uplift that is typical for this time of the year.
“Despite the reopening of shops in June, it is clear that the lockdown-induced shift to online shopping has led to a permanent change in consumer behaviour. Online spending as a proportion of total retail is now 28.1%, compared to 20% in February 2020, indicating what is surely a ‘new normal’ for retail. The challenge, however, is that continued growth in online retail in the months leading up to Christmas could put tremendous pressure on supply chains and fulfilment systems – retailers will need to start managing Christmas demand levels now so as to avoid empty shelves come December.
“While August has been a fairly good month for the sector, retail leaders will be looking ahead at significant headwinds on the horizon. The ending of the furlough scheme could lead to a sharp rise in unemployment, and will therefore affect consumers’ disposable income. Add to this wider concerns about Brexit preparedness and potential impacts to supply chains, and retailers will be forgiven for having short fingernails over the coming months.
“The last three months of the year – traditionally the ‘Golden Quarter’ – will be make or break for many retailers. There are two broad strategies to take: either chase sales to shift 2020 stock, through promotions and heavy discounting at Black Friday and Cyber Monday events, or maximise profitability and long term stability. Retailers need to be alive to bumps in the road ahead, otherwise it won’t be a very Merry Christmas.”
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