Tightening of purse strings in light of higher prices | KPMG | UK

Tightening of purse strings in light of higher prices

Tightening of purse strings in light of higher prices

Shoppers will now need to reassess their shopping lists, balancing the budget between non-discretionary and discretionary spend.

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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.” 

-ENDS-

 

For further information please contact:

Simon Wilson, KPMG Corporate Communications

T: +44 (0) 207 311 6651

M: +44 (0) 778 537 3397

E: simon.wilson@kpmg.co.uk 

KPMG Press office

Tel:  +44 (0) 207 694 8773

 

About KPMG

KPMG LLP, a UK limited liability partnership, operates from 22 offices across the UK with approximately 13,500 partners and staff.  The UK firm recorded a revenue of £2.07 billion in the year ended 30 September 2016. KPMG is a global network of professional firms providing Audit, Tax, and Advisory services. It operates in 155 countries and has 189,000 professionals working in member firms around the world. The independent member firms of the KPMG network are affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity.  Each KPMG firm is a legally distinct and separate entity and describes itself as such. 

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