Head of Retail at Deloitte comments on today’s ONS retail sales figures

Oliver Vernon-Harcourt, head of retail at Deloitte

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

“September saw a slight fall in retail sales values and volumes – down 0.2% and 0.4%, respectively. This marks the longest period of consecutive downturn, despite overall sales remaining higher than pre-pandemic levels. Even as more workers returned to the office in September, this was not enough to significantly lift High Street footfall.

“With many consumers unable to fill up their car as a result of empty forecourts, some may have turned to online grocery delivery instead, boosting online food sales by 0.2% this month – up 2.1% year-on-year – to take an overall share of 10.6%.

“Overall online sales also lifted this month, accounting for 28.1% of all retail sales. This figure remains high indicating that lockdown shopping habits are continuing, reflecting a new online base. Pressures on travel and convenience as we enter the colder months will likely sustain this online preference, putting Christmas 2021 on track to be the most digital Christmas ever.

Supply chain nightmare before Christmas

“Consumers are keen to make up for last year’s lost Christmas celebrations and, those that can, will spend more money over the festive period. Public awareness of supply chain disruption means some consumers have already made a start on gift shopping amid concerns around the availability of some goods.

“However, many retailers have anticipated this, bringing Christmas lines in early to avoid a stock nightmare before Christmas. An extended Christmas shopping period should also ease the usual demand peaks, making it more manageable for retailers.

Consumers to spend less in Q4

“Deloitte’s latest Consumer Tracker, out on Monday, indicates that pent-up demand as a result of last year’s lockdowns will slow going into the retail sector’s ‘Golden Quarter’. Consumers indicate that their net discretionary spending will fall five percentage points over the coming three months. This appears to be more of a ‘normalisation’ of going out expenditure, rather than a drop in food and non-food spending.

“With inflation and the cost of living on the rise, it remains to be seen whether consumer spending changes in the months ahead because they want it to, or because it has to.”

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