Deloitte comments on ONS Retail Sales figures
22 March 2018
Commenting on today’s ONS retail sales figures, Ian Geddes, head of retail at Deloitte, said:
“February’s retail sales values (ex-fuel) rose by 3.4% year-on-year and 0.6% month-on-month. Valentine’s Day, Shrove Tuesday and the half term break were spending events that encouraged consumers to delve into their pockets. After a challenging 2017 for the grocers, food sales have fared well as a result of a general shift in spending towards essential categories, but the market is still proving to be unsympathetic to the non-food segment of the market, especially clothing. Consumers spent £1.2bn a week online in February, and online sales now account for 17.2% of the retail market.
“It is, however, important to realise that the period covered for these figures (28 January to 24 February 2018) does not include the disruption caused by the ‘Beast from the East’, which first hit the UK on 28th February. The snow is likely to have significantly impacted March’s retail sales figures and the full toll of the affected supply chains, deliveries and high street footfall will be revealed next month. General merchandise and clothing has already been having a tough time, and the bad weather will only exacerbate the challenges that are facing them.
“The retail sector is facing unprecedented challenges, and the considerable media coverage around some well-known high street names is an indication that there is little room for error. That said, retailers should find some encouragement by the improving economic conditions and the fact that the squeeze on consumer spending power appears to be easing. Low unemployment, falling inflation and rising real wage growth should give some comfort to consumers.
“Not everyone is struggling, and there are a number of bright sparks that should be commended. These are typically strong brands that understand their customers and use technology wisely to deliver positive revenue growth and mitigate cost pressures.”
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