Paul Martin, UK Head of retail at KPMG, comments on the latest Office of National Statistics (ONS) retail sales figures for November.
“Whilst the latest figures point to an overall picture of growth, you need to ask what the cost of this growth actually is. Many retailers are struggling to maintain profit margins, as they try to navigate the plethora of increasing cost pressures, but Black Friday prompts them to slash prices for fear of being overlooked by customers. At the same time, shoppers are seeing their purse strings tighten as wage growth lags ever further behind inflation. If both continue to head in the same direction, retailers and shoppers will inevitability trip up over one another and there will be casualties.
“That said, this is no time for retailers to turn in Ebenezer Scrooge, with the next few days often marking the difference between success and failure for many retailers. Ensuring that brands remain firmly on the radar of busy consumers will be the key to success. Likewise, convenience will always be a winner at this busy time of year.
“It will be interesting to see how the polarisation between food and non-food plays out in the coming months. Consumers have notably clawed back on discretionary items in light of pricier essentials, like food. Perhaps the Christmas stocking will be a little lighter, whilst we focus more heavily on the Christmas feast instead.”