Commenting on the ONS retail sales figures for December 2017 published today, Andrew Westbrook, head of retail at RSM said:
‘Despite a decrease in footfall and consumer spending pressures, retail sales in December rose 4.4 per cent in value terms versus the same period last year, and were up 1.4 per cent in volume terms. But as the ONS acknowledges the longer term picture is one of slowing growth. In 2017, the quantity bought in retail sales increased by 1.9 per cent, the lowest annual growth since 2013.
‘The ONS figures also show changing patterns in consumer behaviour. Shoppers bought more in November rather than in December, choosing to bring forward their Christmas shopping to take advantage of Black Friday sales. This sales promotion is no longer restricted to one day with many retailers now offering sales for an extended period in November.
‘Many retailers may not like the Black Friday phenomenon as it forces them to discount at an earlier stage than they might otherwise wish to. In the US, there is some evidence that retailers are pulling back from heavy discounting on Black Friday, but in the UK, it now appears to have become a permanent fixture in the calendar. Whether UK retailers choose to follow the US lead remains to be seen, but they will have to adapt to changing consumer demand patterns.
‘The figures also show a continuation of the trend towards more online spending with £1 in every £5 now being spent online. However, online retailers with a physical store presence dominated online sales growth in December. Retailers who have a consistent and engaging online and offline presence, and who are leveraging their high street brand profile to drive online sales are the ones which are tending to do well.
‘Our recent research revealed that consumers – and particularly millennials – still value the high street as a destination for meeting friends and family and for socialising. We therefore expect more online-only retailers to establish and grow their presence on the high street over the coming year.’