ONS retail sales figures comment
23 March 2017
Commenting on today’s ONS retail sales figures, Ian Geddes, head of retail at Deloitte, said:
“February is traditionally a challenging month for retail sales, but today’s figures show a stronger increase than expected. Month on month retail sales values have increased by 1.7% (excl fuel), up 5.2% (excl fuel) from the previous year. Price pressure, however, continues to be an issue as rising petrol prices begin to impact the quantity of goods bought.
“Inflation has been a hot topic for the industry this week, driven by rising prices for transport and food. However, February’s figures show that a little inflation can be a good thing for grocers particularly following a prolonged period of deflation in the sector. Food sales values have shown growth year-on-year of +1.6%. Consumers remain broadly confident but it is clear that retailers can only absorb so much of the cost pressures caused by rising inflation: if the trajectory continues then it is inevitable that consumers will see prices starting to rise.
“In addition to economic conditions, the retail industry is also having to contend with a rapidly changing technology environment. Consumers’ adoption of digital technologies, such as smartphones and voice-controlled devices, continues to drive a revolution in the way retail is conducted. Online sales saw a very strong growth in this period, up 20.7% year on year and 3.3% in January.
“Overall, the outlook remains one where consumer spending might slow progressively in 2017 but not necessarily immediately. However, in order to combat eroding profit margins and technological disruption, retailers need to think carefully about their offerings and ensure that they do not over stretch themselves. Indeed, rather than catering for all needs and desires, now is the time for retailers to focus on specialisation, differentiation and innovation, in order to ensure they remain as competitive as possible whilst maximising profits.”
Notes to editors
In this press release references to Deloitte are references to Deloitte LLP, which is among the country's leading professional services firms.
Deloitte LLP is the United Kingdom member firm of Deloitte Touche Tohmatsu Limited (“DTTL”), a UK private company limited by guarantee, whose member firms are legally separate and independent entities. Please see www.deloitte.co.uk/about for a detailed description of the legal structure of DTTL and its member firms.
The information contained in this press release is correct at the time of going to press.
Member of Deloitte Touche Tohmatsu Limited.