Retail growth slows as shoppers hold on to their cash

Retail growth slows as shoppers hold on to their cash

Home » Retail growth slows as shoppers hold on to their cash

In what is becoming the defining narrative for retail in 2019, the ONS has today released statistics showing very slight growth in retail despite ongoing headlines of big-name retailers facing significant financial difficulties.

Post By Craig Bennett -
CEO

Retail growth slows as shoppers hold on to their cash


The three-month view of quantity bought, along with the year-on-year view, have both shown modest growth in line with the slow and steady increases seen over the course of the year, with increases at 0.6% and 2.7% respectively.  However, this story of growth is also peppered with some declines as both the monthly growth rate and, somewhat surprisingly, online sales have dipped slightly.  Compared to last month, both have slipped by 0.2%, though online still stands at a healthy 19.7% of all sales.

This latest report corroborates what we know already across retail – it’s a volatile and fluid environment in which a variety of factors are influencing the trends.  Interestingly, following my observations last month about the disparity in figures being released by various bodies around the state of the retail sector, Retail Week wrote a detailed piece exploring this further.  Their view is that the true state of affairs probably lies somewhere between the monthly ONS report and that of the BRC (British Retail Consortium).  The retailers that contribute to the data, the breadth of data collected and the period being analysed all contribute to the reports and commentary released and so it’s no wonder we’re seeing several versions of the truth.  If you’re interested in the article then you can read it here:

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ONS Data


We’re continuing to see factors such as weather being cited as reasons for fluctuations in sales, which makes any direct comparison rather trickier.  However, the ONS data shows that sales have increased roughly on par with the same period last year, hovering around a 2.6%/2.7% increase.  Month on month, however, August has bucked the trend and decreased by 0.6% with no obvious reason why.

Turning to online sales, this sector has increased by 11.6% when compared to the same time period last year.  In contrast, there has been a slight decrease in the monthly view of 0.8%.  Non-store retailing, a sector that includes online-only retailers, is the largest sector contributor to year on year growth in terms of percentage points at 1.7.  It also had strong growth in quantity bought of 4.8% (three-month on three-month view).  Comparatively, department stores are continuing to struggle with the twelfth consecutive month of no growth.  Sitting behind this, the monthly view is one of decline, albeit only 0.2%, possibly as a result of a heavily-discounted July which showed unexpected growth last month.

Household goods is another sector struggling with sales; while ONS is reporting a growth from July of 2%, year on year this is part of a negative 5.6% decline.  Once again however, a good summer and national sporting events boosted sales in 2018 making the year on year picture slightly distorted.

It’s possible that the political turmoil around Brexit and what this might mean in the event of a no-deal exit is now starting to bite as Brits become a little more wary about making big purchases.  That said, the fact we’re still seeing shoots of growth means that for now at least, it seems the high-street and its online counterparts will continue to live another day.

 

Read the ONS Report for July


Whilst the CBI is warning retailers to expect the sharpest deterioration in retail conditions in over ten years the ONS remains a little more positive, pointing to an overall increase of 0.2% month on months for sales in the sector, buoyed by a near 7% increase in online spending.

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