Richard Hyman, strategic adviser to the retail practice at Deloitte, said: “The ONS numbers present a picture of a resilient high street but when placed in the context of the weight of anecdotal evidence, have to come as a surprise.  It is clear that retail as a whole is experiencing very difficult times but this does differ sector by sector.

“The sales value figures suggest that food retailers continue to perform well with year on year sales value showing 6.7% growth.  However, there is a stark divide between food and non-food.  Non-food sales values are down by 0.4% on the same time last year.

“The high number of promotional Christmas sales that are already taking place indicates the pressure retailers, particularly non-food, are under.  There is a risk however, that whilst retailers look to stimulate demand they depress the amount of money coming into their tills.  However, sales at this time of year do play well with consumers.  Deloitte’s Christmas Retail Survey found that those consumers most interested in searching for bargains begin their Christmas shopping earlier.  They will be making the most of the opportunities currently on offer.”

Roger Bootle, economic adviser to Deloitte, added:
“This is the first time in over 15 years that the UK will be celebrating Christmas during a recession.  That is hardly the economic backdrop to encourage festive cheer for consumers or retailers.  And signs of increased pressure can already be seen.  High street spending growth has been slowing for some time now, at least judging by the survey measures of retail sales growth.  The official sales figures have been more resilient but seem wholly inconsistent with what we are hearing.

“I think that by the time we reach the bottom of this recession, consumer spending will be in negative territory.  And I wouldn’t be surprised if Christmas marks the point at which the downturn starts to step up a gear.”

Ends

Notes for editors
Deloitte published its 14th annual Christmas Retail Survey earlier this month.  For further information, download a copy of the report For further information, download the full report 'The Retail Review – Christmas Retail Survey 2008'. (PDF, 845KB)

About Deloitte
In this press release references to Deloitte are references to Deloitte & Touche LLP which is among the country’s leading professional services firms, providing audit, tax, consulting and corporate finance services. Deloitte & Touche LLP is the United Kingdom member firm of Deloitte Touche Tohmatsu (‘DTT’), a Swiss Verein whose member firms are separate and independent legal entities.  Neither DTT nor any of its member firms has any liability for each other’s omissions.  Services are provided by member firms or their subsidiaries and not by DTT.  Deloitte & Touche LLP is authorised and regulated by the Financial Services Authority.  The information contained in this press release is correct at the time of going to press.