Deloitte comments on today's ONS Retail Sales figures

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

“August saw a slight slowdown in retail sales values, up just 1.4% while volumes were down -0.9% month-on-month. This was partly because of the month’s dreary weather, resulting in fewer feet falling on the high street. Unsurprisingly considering the low base, retail sales growth remains high year-on-year, with values and volumes up 7.4% and 5.3% respectively. Consumers continue to spend on hospitality and leisure activities, such as eating and drinking out, following the easing of restrictions over the summer, with encouragement from the summer of sport.

“Many businesses talk about ‘waiting for the new normal’, but the reality is that consumer behaviours have now steadied, and this is the new normal. In August, online purchases accounted for 27.7% of all retail sales, compared to nearly 20% pre-pandemic. As a result, retailers are wrestling with the conundrum of where to invest and where to allocate capital, whether in-store or online. Many retailers are also experimenting with new ways to improve the consumer experience and remain attractive to, for example, the more conscious consumer, including zero waste trials and hybrid shopping.

“A perfect storm of labour shortages, supply chain issues and increased demand will continue to test retail leaders as we enter the Golden Quarter. Christmas will be impacted by these headwinds; there will very likely be shortages in some categories which will force consumers to make different choices. Retailers – particularly grocers – will have to decide which products to put on the shelves, prioritising higher-margin products where possible. Managing price increases and stock shortages will be one of the main challenges retail leaders will have to address in the coming months.”

-ENDS-

Notes to Editors

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