21 January 2011
Commenting on today’s ONS retail sales figures, Richard Hyman, Strategic Retail Adviser to Deloitte, said: “Today’s figures undoubtedly reflect the impact of the severe weather that struck most of the country last month. Many shoppers were at times unable to get to the high street and when there was a window of better weather, only had time to visit a few stores. We estimate that around £750m of retail spend was taken out of the market as a result of the snow.
“As a result, the Christmas trading statements have been harder to read this year than ever. One thing has been clear though, the gap between the winners and losers has been far greater than might have been reasonably expected. With limited time available, it appears some retailers benefited from consumers choosing to do more of their shopping in fewer stores.
Ian Geddes, UK Head of Retail at Deloitte, said: “This Christmas was all about convenience and in particular, those retailers with multi-channel operations (online and stores) performed strongly. Although trading cooled off a little as we got closer to Christmas, with consumers concerned about the ability of some online retailers to fulfil orders as a result of the weather, overall growth for online will be well into double-digits. It also appears that retailers with a higher proportion of stores closer to residential areas did better than those with a greater number in edge or out of town shopping spaces. This particularly appears to be the case in grocery.”
Hyman added: “The weather has had a material impact, depriving the trade of a useful boost as we now enter what we will be an exceptionally challenging 2011. VAT has already increased and a rising inflation rate suggests an interest rate rise is a distinct possibility. Consumers will have less money in their pocket this year and it is very difficult to see how retail can escape unscathed from this. I do not expect retail sales to grow at all in 2011, with the possibility of a fall still very possible.”
