Deloitte head of retail comment on ONS retail sales figures
19 January 2018
Commenting on today’s ONS retail sales figures, Ian Geddes, head of retail at Deloitte, said:
“Whist December’s retail sales values have risen by 4.4% year on year, outstripping inflation, the amount spent has fallen by -0.9% since November. While the UK’s leading grocers have reported relatively robust trading in the run up to Christmas, overall the performance of the grocers has been weaker than many expected, with today’s figures showing that the UK bought less food than last year.
“ONS figures show that more money was spent in non-food than any other sector. However, given the amount of promotional activity during the festive period, how profitable these retailers have been over Christmas remains a question.
“December’s online sales have continued their upward trajectory, with a 9.4% increase year on year, and were further boosted by the inclusion of Cyber Monday’s sales. Online retail accounted for 18% of all retail sales in the run up to Christmas: a clear sign that digital is outpacing sales on the high street.
“We have already seen some very strong Christmas performances from online specialists, indicative of what has been a seismic shift in consumer behaviour in recent years. Retailers that have a strong online presence tend to able to adapt swiftly to changes demand and can offer discounts and other incentives that are attractive to consumers. This is increasingly proving to be a competitive edge over traditional physical retailers.
“Retailers should find themselves in calmer waters this year after what was a choppy 2017. Not only will they be relieved to see that inflation has fallen, albeit modestly, for the first time in six months, but there are other economic fundamentals that are helping consumers. Unemployment remains at a record low and wages are rising, which is good news for consumers’ pockets. The retail industry will remain cautious, and rightly so, but there should be some opportunities to grow in the next 12 months.”
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