Deloitte comments on today's ONS retail sales figures

Commenting on today’s ONS retail sales figures, Jason Gordon, consumer business partner at Deloitte, said:

“January’s retail sales values increased marginally by 2.9% (excluding fuel) from the previous year, largely due to low comparatives from January 2016. The slight drop off in month-on-month values and volumes (both -0.2%, ex fuel) from December 2016 is as expected. Strong spending over Christmas inevitably led to a drier January, with the sector acknowledging that it has been a slow start to 2017 in terms of retail sales.

“With average store prices increasing by 1.9% on the year, it is likely that we will see consumers choosing to focus their spending on everyday essentials such as food and fuel, rather than on discretionary items. The 10.1% year-on-year increase in online sales is another indication that nothing is stopping the march of e-commerce, accounting for 14.6% of all retail spending.

“Over the course of the year, consumer spending may slow progressively, but not immediately. UK consumers remain more optimistic than they were a year ago, and confidence for those aged 18-34 is at the highest level for six years, despite the threat of rising inflation. Record levels of employment and some growth in earnings in the last quarter of 2016 have boosted spending, but it is unclear how long this will last. In short, the outlook for the sector for the rest of 2017 is cloudy.

“For retailers, who are already having to cope with the build-up of various cost pressures, are also having to contend with the next wave of technological disruption to the sector. Businesses will need to prioritise investment in the technologies that will increase efficiency or improve the customer experience. In the coming months, retailers will need to focus on accelerating change in their businesses in order to maximise profitability and remain competitive.”

End

Notes to editors

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