Deloitte comments on ONS retail sales
18 January 2019
Commenting on today’s ONS retail sales figures, Ian Geddes, head of retail at Deloitte, said:
“Retail sales values for December fell 1.1% compared to November, with volumes also falling 1.3% for the same period. These month on month figures indicate a challenging Christmas for retailers. However, both retail sales values and volumes are up, 3.1% and 2.6% respectively, compared to December 2017.
“Christmas arrived late for retailers, but it wasn’t cancelled. December’s figures clearly show some of the effects of heavy discounting from retailers, both in the run up to Christmas where the average pre-Christmas discount reached 48%, and Boxing Day sales thereafter. What remains to be seen, however, is the level of heavy discounting combined with Christmas gift returns and its impact on year-end profitability.
“A record proportion of sales were made online over this period: 20% of overall sales, making December 2018 the most digital Christmas ever. It is worth acknowledging that the period includes Cyber Monday, the biggest on record, which may have boosted overall sales and could explain why December had a slow start for many retailers. This slowdown highlights a shift in consumers making many of their Christmas purchases before December.
“This month’s reporting marks the end of what has clearly been a challenging year that continues to bite high street retailers who are facing pressures from rising costs, more cautious consumer spending, and strong online competition.
“We are seeing a promising level of innovation on the high street, particularly from new entrant brands and online retailers. This is making life difficult for traditional retailers who are having to adapt to the changing consumer and invest significantly to stay relevant.
“As we head into 2019, those retailers looking for inspiration could look to the East. New in-store technologies that seamlessly join the dots between the online and in-store experience, for example, are already mainstream across many cities in China. We are increasingly seeing these technologies experimented with in the UK, with potential to completely change the face of the high street as we know it today.”
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