Shoppers will now need to reassess their shopping lists, balancing the budget between non-discretionary and discretionary spend.
Commenting on the latest Office of National Statistics (ONS) retail sales figures for the month of January (published 17 February), Paul Martin, UK Head of Retail at KPMG, said:
“The ONS retail sales figures confirm that higher pricing has resulted in a tightening of purse strings. However, it’s also worth remembering that January typically sees consumers claw back following a festive splurge in December.
“With the figures revealing the first fall in quantity of goods bought in the 3 month to January 2016 since December 2013, it is clear shoppers are beginning to take note of consumer price inflation. Previously they had carried on as normal following the Brexit vote and had even defied consumer confidence indices.
“It was inevitable that the increased costs faced by retailers would trickle down to price-tags. Whilst retailers will have benefitted from currency hedging in the short to medium-term, reality had to hit eventually. Shoppers will now need to reassess their shopping lists, balancing the budget between non-discretionary and discretionary spend. Meanwhile, retailers will need to reassess how best to remain competitive in this new landscape.”
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