The Retail Sales statistics released on 17th December apparently show a very different landscape to the reality of quantitative sales which rose by 1.7% but only 1.4% came out as growth in value – and annual sales events Black Friday and Cyber Monday did little to bridge the gap.
The key findings from the Retail Statistics by the ONS showed:
- Year-on-year estimates of the quantity bought in the retail industry show growth for the 31st consecutive month in November 2015, increasing by 5.0% compared with November 2014.
- The underlying pattern in the data, as suggested by the 3 month on 3 month movement in the quantity bought, showed growth for the 23rd consecutive month, increasing by 2.1%.
- Compared with October 2015, the quantity bought in the retail industry is estimated to have increased by 1.7%.
- The amount spent in the retail industry increased by 1.4% in November 2015 compared with November 2014 and increased by 1.4% compared with October 2015.
- The value of online sales increased by 12.7% in November 2015 compared with November 2014 and by 4.9% compared with October 2015.
According to Phil Mullis, partner and head of retail and wholesale at top-20 UK accountancy firm, Wilkins Kennedy, savvy customers are still shopping around for bargains this close to Christmas and are actually returning items to stores in order to get the best deals.
Mr Mullis commented: “A contact of ours at Blue Yonder, a German-owned technology company, carried out a survey this week which highlighted that 20% of parents are returning gifts prior to Christmas due to them finding a product cheaper elsewhere. For a relatively high percentage, I am surprised that this hasn’t affected retail sales during November more seriously.
“No doubt the value of retail sales was propped up by the 16% increase in online sales over Black Friday but we should not ignore the 8% decrease in physical footfall sales. What is good for one channel is not good for another.
Markus Juhr-De Benedetti, chief revenue officer at Blue Yonder commented: “1 in 5 out of 2000 parents we surveyed have already bought and returned Christmas gifts, only to buy them again at a lower price. The digital age has allowed customers more choice when it comes to selling, but it has also made the retail environment extra competitive. Retailers and e-tailers need to make sure they are at the top of their game this Christmas and during the January sales if they want to have the lion’s share of footfall.
“We should be cautiously optimistic for December retail sales. Consumers continue to have money in their pockets to spend, so it will be interesting to see if the level of returns will impact December’s retail sales.”