KPMG comments on ONS retail figures for December 2016.
Commenting on ONS retail figures for December 2016 out today, Paul Martin, UK head of retail at KPMG, said:
“Despite a slew of positive financial reporting from retailers over the past couple of weeks, ONS retail figures out today suggest December was actually a bit of a bah-humbug on the high-street. Overall sales fell 1.9% versus November 2016 – the biggest dip in monthly sales since April 2012. However, compared to December 2015 sales actually increased 4.3% which suggests the month wasn’t all ‘doom and gloom’.
“Nevertheless, it seems Black Friday continues to cannibalise festive spending as figures suggest consumers took advantage of deeper discounts at the end of November to make Christmas purchases earlier.
“Etailers too saw a decline versus November with sales down 5.3%, though online as a percentage of total sales continues to increase overall. With average store prices starting to rise, particularly at the petrol pumps, this means as more and more sales move online, retailers are going to start to experience an increase in the cost of fulfilment.
“In contrast, there was a sprinkling of festive cheer for small retailers with sales up 17.4% compared to December 2015. According to the ONS, butchers benefitted from the festive period as consumers chose locally sourced meats and poultry to beef up festive feasts.
“However, with inflationary pressures on the horizon, coupled with continued foreign exchange fluctuations, we could well see more significant price increases over the course of 2017 which in turn could lead to further declining sales across the board.”
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