19 Jan 2018
Lower margins and squeezed prices revealed a disappointing end to the Golden Quarter in the December Retail Sales, as it appeared consumers bought their spending forward to November 2017 with events such as Black Friday.
The key findings from the Retail Statistics showed:
Phil Mullis, Partner and Head of Retail and Wholesale at top-20 UK accountancy firm, Wilkins Kennedy, said: “December’s Retail Sales revealed a disappointing end to the Golden Quarter 2017 with a fall in purchase quantity of 1.5% compared to November 2017. Yes, there was small growth at 0.4% in the last three months compared to the previous three months but the overall trend is downwards.
“We continue to see inflation outstrip wage growth and while this remains it will be difficult for the retail sector to grow.
“Retail health indicators are based on demand, margin and cost. A fall in consumer demand coupled with rising input costs will force retailers to squeeze their profit margins. However, a discount-led purchase model to drive demand is not sustainable, as we have seen recently from the likes of Debenhams and Jaeger before them.
“Pureplay retailers and online purchasing seem to continue to do well, but retailers will need to think about where they fit into the 2018 marketplace in order to remain competitive.”