Commenting on today’s ONS Retail Sales figures, Euan Murray, Relationship Director, Barclays Corporate Banking, Scotland, said:
“As we’ve seen from recent announcements by individual retailers, most of the industry enjoyed a really good Christmas with sales remaining strong in December. The ONS data backs this up, revealing solid year-on-year growth. Although the December figures were down on November, it would be a mistake to focus too heavily on a monthly drop in sales. This partly reflects the industry’s evolving approach to Black Friday and the period after it, as Christmas spending is now spread over a longer period. It doesn’t really matter to a retailer whether they generate revenue in November or December. What they care about is their overall performance, and this data shows that the net result for the final quarter was much more impressive this year.
Perhaps the most notable finding to highlight is on pricing, as retailers have reported the first price increase excluding fuel for two and a half years. Prices may have been slightly impacted by changing Christmas strategies, but this could indicate the start of more sustained price rises. There is an expectation that prices will go up this year, in part due to the fall in the value of sterling and other cost challenges. One way to counter these cost pressures will be to take advantage of the opportunity to increase overseas sales presented by the weaker pound, especially online. For domestic sales, the crucial question for retailers to answer now is how quickly and by how much they move their prices, as finding the balance between protecting margin and retaining consumer demand will be essential if retailers are to post more successful results in future months.”