Deloitte comments on today's retail sales figures
19 October 2017
Commenting on today’s ONS retail sales figures, Ian Geddes, head of retail at Deloitte, said:
“September’s retail sales (ex-fuel) have seen values rise by 4.6% year-on-year. However, the month-on-month picture is different - sales values have fallen by 0.6% since August, and the fact that sales volumes are also down is an indication that the year-on-year growth is largely due to price rises in reaction to consumers favouring essentials to discretionary spending.
“Online sales values have increased by 14% year-on-year, and online now accounts for 17% of all retail spending, with consumers spending £1.2bn a week online. Recent company results have shown that online marketplaces have performed particularly well, and we expect they are likely to continue to see sales growth in the coming months. Consumers like the convenience of being able to shop for big name brands and niche labels all from the same online portal, as evident by the 40% growth in online sales of clothing and footwear this month. Retailers should look to capitalise on this trend and ensure that their supply chain models are robust enough to fulfil consumer demand from online marketplaces.
“Against a well-documented backdrop of rising inflation, increasing levels of debt and fragile consumer confidence, the retail industry will have been looking forward to entering the final three months of the year – typically a crucial trading period that encompasses both Black Friday and the Christmas shopping periods.
“However, the prospect of the Bank of England raising interest rates for the first time in over 10 years next month could come at a challenging time for the retail sector. Issues around consumer finances, spending power and rising cost pressures are already challenging the industry: an interest rate rise could cause an additional headache for retailers in the lead up to Christmas.”
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