Deloitte comments on ONS retail sales

Commenting on today’s ONS retail sales figures, Cande Cooper, UK retail consulting lead at Deloitte, said:

“December’s festive period wasn’t enough to boost retail sales as volumes fell by 1.0%, an unexpected deterioration. This marks two consecutive months of retail sales decline in the ‘Golden Quarter’.

“While there were some winners in the grocery sector, food sales volumes fell 0.3%, with many consumers managing reduced budgets. Price sensitive consumers still made use of the pre- and post-Christmas discounting period by picking up items in the sale, however non-food sales took a significant hit with sales falling by 2.1%.

“The outlook for the next twelve months remains difficult for both consumers and retailers. While inflation is beyond its expected peak, it will still be one of the drivers behind retail sales value growth, with costs ultimately being passed on to consumers that could negatively impact demand.

“Many consumers will continue to adopt recessionary behaviours in 2023, including trading down, switching to cheaper stores, repairing or fixing items, and cutting back on non-essential purchases, especially those requiring financing which will be impacted by high interest rates.

“Retailers are navigating an uncertain environment as they continue to manage costs down while simultaneously trying to grow revenues. Those who continue to offer good value and innovative products, coupled with quality customer experience will be most likely to succeed. Personalised and dynamic consumer loyalty schemes will also play a part to attract and retain shoppers on a budget”.