Deloitte comments on today's ONS retail sales figures
15 June 2017
Commenting on today’s ONS retail sales figures, Ian Geddes, head of retail at Deloitte, said:
“The retail sales values and volumes for May decreased by 1.2% and 1.6% respectively (ex-fuel) from the previous month, largely due to April’s strong comparatives. The year-on-year change paints a slightly more positive picture for retailers, with values increasing by 3.5% from May 2016, although volumes are far more muted – increasing by 0.6%, which is the lowest growth since April 2013. This is an early indication that prices in store are starting to rise and that it is impacting demand.
“This week has seen UK inflation rise to 2.9%, the highest since June 2013. We are starting to see this impacting average in-store prices, which increased by 2.8%, the largest growth since March 2012, and non-food saw the biggest price rise since October 2011. This suggests that retailers are having to pass some of the cost pressure from the rising price of imported goods on to consumers.
“Consumers will also be feeling the squeeze in other areas of spending, including electricity and other utilities payments. In addition, real wage growth is now in negative territory, which will likely dampen consumer confidence in the coming months. With this in mind, it is likely we will see the industry renew its thinking on building customer loyalty – it is much cheaper to retain existing customers rather than attract new ones.”
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