- online offsets a weaker performance on the high street
- supermarkets wage relentless discounting campaign in order to protect market share
David McCorquodale, UK Head of Retail at KPMG, comments on the latest Retail Sales figures from the Office for National Statistics:
“This is a solid performance by UK retailers and this increase in consumer spending gives us hope that the UK economy might be finally turning the corner.
“However, promotions were used to drive these sales, especially in the food sector, and this decision to discount will have eaten into retailers’ margins.
“It has been a battlefield in the supermarkets with blanket discounting campaigns and price match schemes used to persuade customers to shop in their stores. When one grocer pushes the discount button, the others are forced to follow suit in order to protect their market share.
“This relentless campaign on price must be damaging their margins and shows no sign of abating, because customers remain highly sensitive about food prices, which eat into such a high proportion of their household budget. So yes, food sales are up, but the real question remains at what price to the retailers.
“Elsewhere online sales proved a saving grace and offset weaker sales on the high street. Online and digital have proved to be an essential weapon in a retailer’s arsenal, and will continue to grow in importance as consumers increasingly use more and more technology in their day to day lives.”
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