Helen Dickinson, head of retail at KPMG comments on the latest Retail Sales figures from the Office for National Statistics:
“These results are positive, but they do not paint an accurate picture of the current state of the retail sector. Retailers achieved these sales through heavy and prolonged discounting and this has seriously damaged the health of the retail sector. Margins have been hit so hard that retail health is widely considered now to be in a worse state than at the depths of the 2008 recession. Today’s figures are also against December’s weak results, which saw sales badly affected by snow.
“As usual, we need to interpret the ONS retail sales figures with a level of caution, given the significant, usual and often inconsistent variations we have seen in this data in the past.
“Whilst the ONS say the value of retail sales increased by 6.2% in December 2011 compared with December 2010, these figures include fuel prices. Take away the fuel and according to the ONS retail sales growth stands at 4.3%, which for the first time in some months, is actually consistent with data from other sources. Food came out as the top sector performer, but clothing and footwear also had a strong month, following a difficult year.
“Serious challenges lie ahead for retailers and it seems certain that this level of demand will not continue as the year progresses.”
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