David McCorquodale, UK Head of Retail at KPMG, comments on the latest Retail Sales figures from the Office for National Statistics:
“Whilst the ONS statistics paint a negative picture, my sense is that January was in fact a relatively flat month. If you strip out sales of petrol, sales volumes rose marginally by 0.2% and values increased by 1.6%, which was slightly behind inflation. This appears to hint at continued margin pressure in the retail sector with goods being discounted to shift volumes. Interestingly, for those retailers selling winter and outer wear, the snow perhaps came fractionally too late. Retailers had already launched their seasonal sales and slashed the prices of winter gear when customer demand for cold weather clothing drove up volumes.
“I am surprised to see the trend away from smaller retailers during the week of snow. A layer of snow normally drives consumers to local convenience stores, but it appears that the on-line grocers have picked up this volume, rather than the local convenience store.
“Generally speaking though, I still maintain that, despite the collapse of some High Street names in January, the larger retailers will be satisfied that their seasonal campaigns were successful. They are now dealing with much choppier waters in the food sector, which will have longer term ramifications for the industry.”
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KPMG LLP, a UK limited liability partnership, is a subsidiary of KPMG Europe LLP and operates from 22 offices across the UK with over 11,000 partners and staff. The UK firm recorded a turnover of £1.7 billion in the year ended September 2011. KPMG is a global network of professional firms providing Audit, Tax, and Advisory services. We operate in 152 countries and have 145,000 professionals working in member firms around the world. The independent member firms of the KPMG network are affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity. KPMG International provides no client services.
