Consumer confidence remains fragile

According to the Office for National Statistics (ONS) latest retail sales figures, retail sales volumes fell by 0.3 per cent month-on-month in November. Year-on-year sales were up 3.1 per cent during the same month, a slow-down from October’s 3.7 per cent rise.

Jane Whitlock, consumer business partner at Deloitte in Birmingham, said: “Today’s figures from the ONS show that whilst consumer spending has been resilient in 2009, confidence remains fragile.  Consumers recognise that 2010 will bring a number of challenges for their personal finances, starting with the VAT increase on 1 January.  These challenges will undoubtedly influence their purchasing habits and lead to continued weakness in consumer spending growth.

“This year hasn’t been as bad as many had feared, but whether it can be called a success still hangs in the balance with a key fortnight of trading to be done.  We may only be able to say whether 2009 was a ‘good’ year for retail when we see the full picture. 

“What we are seeing now though is the smarter retailers raising their heads above the storm to look into 2010 and beyond.  The fundamentals of retail are changing.  In the past decade growth was comparatively easy to achieve.

“The future, however, looks more complex and retailers will need to have a much closer understanding of precisely what their customers want.  Growth will be harder to find and a greater proportion will come from taking others share of the market than is currently the case.

“As ever, the next fortnight will be crucial for retailers with more than 12 per cent of total annual retail sales coming in December.  This year, it is notable that we have not yet seen the same rash of sale signs on the high street that were so prominent in 2008.  This is partly down to better stock management and pricing as retailers planned for tougher times ahead and partly due to retailers spending more of their marketing budgets online this year. 

“It is one thing to generate a sale, but to do so with more targeted promotions will likely maintain the profit margin and must be taken as a positive sign for retailers.”

 – Ends – 

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: