Deloitte comments on ONS retail sales

Commenting on today’s ONS retail sales figures, Oliver Vernon-Harcourt, head of retail at Deloitte, said:

“Retailers will be disappointed with December’s lower-than-expected sales figures. This subdued performance was across the board; from grocers to clothing retailers. Overall, retail sales values and volumes fell 3.1% and 3.7% respectively compared to the previous month. While retail sales values were up 5.7% year on year, volumes were down for the equivalent period, demonstrating the impact of inflation.

“High street footfall fell in December amid Omicron variant concerns in the run up to Christmas. However, grocers were well-prepared for the swift shift to online, with a rise of 9.1% in their online sales as a result of significant investment in scaling up their online offering and infrastructure over the course of the pandemic. Overall online sales remained higher than pre-pandemic levels, accounting for 26.6% of all retail sales.

Inflation fears drive spending slowdown

“Continued rising inflation will put pressure on both consumer spending and confidence over the coming months. Rising household costs will also prompt some consumers to tighten purse strings, at a time when 72% of UK consumers are already concerned that prices for everyday purchases will go up. Despite the adaptability shown by the industry throughout the pandemic, retailers will have to navigate not only inflation headwinds, but also manage continued supply chain disruptions and staff shortages.”

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