Deloitte comments on today's retail sales figures
20 September 2017
Commenting on today’s ONS retail sales figures, Ian Geddes, head of retail at Deloitte, said:
“The retail sales figures for August bounced back after a disappointing July, with retail sales values up 5.6% compared to August 2016 and up 1% compared to July 2017. Non-food sales have outperformed food, growing strongly with volumes up 3.4% and values up 7.9% from last year - a clear indication that some retailers may have benefitted from a ‘back-to-school’ boost.
“Inflation is becoming more evident in the market and more visible to consumers. Non-food sales have seen the biggest rise in prices since March 1992. The current environment presents a core challenge for retailers as consumers no longer have the levels of cash they once had.
“Consumers, who have so far remained surprisingly resilient to these inflationary pressures, may increasingly have to choose what to spend their money on: everyday essentials or discretionary items. In the coming months, we may see some discretionary sub-sectors struggle, and some of the gains we have seen this month in non-food and discretionary categories such as clothing could quickly reverse.
“Retailers may be forgiven for pinning hopes on the last three months of the year. In focusing on productivity and efficiency, retailers will be best placed to tackle the short-term challenge of softening demand and rising costs.”
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