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Deloitte comments on the latest ONS retail sales figures
Archived article dated Thursday October 23rd 2008
Tarlok Teji, Head of Retail at Deloitte, commented, "It is not surprising to see retail sales growth slowing. The continuing diet of negative economic news is filtering down to consumers and this uncertainty is leading them to put new purchases on hold"
He continues,"Consumers are responding to the downturn by repairing existing products or using them for longer than they previously might have done.“However, I think we are seeing the deferment of spending and the extension of product life cycles rather than a complete stop. Christmas is around the corner and come December we may see a rise in sales volumes for sectors such as clothing as practical gifts become more of a priority this year. “And whilst the market is undoubtedly tough for retailers, many have been coping with difficult trading conditions for the whole of 2008. Some retailers have already responded quickly by keeping tighter controls on inventory, updating product ranges to meet their customer needs and focusing on service. The speed at which retailers respond to the new market dynamics will be crucial for their performance over the coming quarter.”
New data published today by Deloitte shows that retail administrations were down 11% in Q3 2008 compared to the same period last year. Lee Manning, partner in Deloitte's Reorganisation Services practice, said: “The retail sector continues to prove robust, seeing only a 3% increase in administrations compared to the previous quarter, but down 11% on the same period last year. Retailers have been cannier than other sectors, with many of them seeing the potential downturn approaching a year ago. They negotiated better contracts, which have since given them the necessary breathing space to navigate these turbulent times. Nonetheless, we expect the numbers of failures to increase steadily in the period after Christmas and New Year once the peak retail selling season ends.”
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