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Deloitte comments on ONS retail sales

Commenting on today’s ONS retail sales figures, Oliver Vernon-Harcourt, head of retail at Deloitte, said:  

“The retail sector managed to shelter from the storms in January, as sales volumes rose more than expected in the first month of the year. This rebound is the largest monthly rise since April 2021 – a significant boost after a disappointing end to 2023. With inflation easing and consumer confidence continuing to rise, expectations are that the Bank of England may cut interest rates in the coming months, providing a further boost to spending power.

“However, with confirmation that the UK economy has now entered a recession, optimism from both consumers and retailers will likely remain tempered. We have seen over recent months that consumer sentiment has decoupled from spending, with many of those feeling more positive, still shopping with restraint.

“For many retailers, the focus will continue to be on getting the basics right: providing real value for money, creating great experiences both in-store and online, and offering a diverse range of innovative products. Stock availability and spring product launches will also require ongoing focus, as global shipping continues to be impacted by events in the Red Sea. Equally, retailers will need to keep one eye on the longer term to make sure they are ready for a potential improvement in consumer spending in the second half of 2024.”