Partner Article

Retail sales rise on last year

The Office for National Statistics has revealed a 2.6% year-on-year rise in UK retail sales for the closing months of 2011, despite other statistics showing a rise in retail administrations.

Sales rose by 0.6% between November and December, following heavy discounting by retailers as part of their pre-Christmas strategy.

The figures are adjusted to allow for the upwards seasonal variation caused by Christmas spending.

Clothing, footwear and fuel retailers drove sales volumes from December 2010, which was hit by harsh weather conditions.

Offsetting the the growth were household goods stores and other stores, which decreased 3.6% and 1.9% respectively.

The rise contrasts the fortunes of chains such as clothing retailer Peacocks, lingerie specialist La Senza, and outdoor specialist Blacks Leisure, who have all now gone into administration.

Paul Feechan, Consumer Business partner at Deloitte in Newcastle said: “Whilst today’s figures appear to suggest that UK retailers did reasonably well this Christmas, this doesn’t tally with the anecdotal evidence I hear from retailers on a daily basis, nor with the evidence we have seen through the scale of distress on the high street in the first few weeks of the year.

“Admittedly, understanding the performance of the industry is not that easy. The timeframes covered by trading statements vary from retailer to retailer and can even differ from one year to the next for an individual company, whilst the like-for-like measurement is also open to infinite interpretations.

“However, what is clear is that whilst there were some excellent performances this Christmas, these were at least evened out by the lack of growth at some of the country’s largest retailers.

“Once you take VAT and last year’s heavy snowfalls into account, the net effect is that Christmas was probably flat at best.

“Looking at the year ahead, it is clear the industry is in for a tough 12 months. Lower inflation may ease the squeeze on consumers a touch, but there are bigger, structural issues for retailers to face.

“Between 2008 and 2011, total retail floorspace fell by 17m square foot. However, over the same period, the internet added the equivalent of 35m square foot.”

Mr Feechan went on to say that the industry is in for a tough 12 months, noting that between 2008 and 2011, total retail floorspace fell by 17m square foot, while in the same period, the internet added the equivalent of 35m square foot.

This was posted in Bdaily's Members' News section by Tom Keighley .