PwC comments on July 2022 ONS retail sales figures

19 Aug 2022

Commenting on the Office of National Statistics retail sales figures for July 2022, Kien Tan, Director, Retail Strategy at PwC, said:

“Perhaps surprisingly, the ONS reported a slight 0.3% increase in retail sales volumes in July 2022. However, looking under the surface, and bearing in mind the additional full trading days in July given the extended Jubilee bank holidays in June, the momentum in retail sales continues to be negative, reflecting the wider cost-of-living crisis and reining back of spending by consumers.

“The improvement in retail sales in July was almost entirely accounted for by non-store sales, reflecting promotional and clearance activity online, such as the Amazon Prime Day event held in June last year, but in July this year.

“These online sales led to an increase in penetration of ecommerce to 26% - still well below the pandemic highs of almost 38%, but providing some respite for embattled online retailers, albeit at the expense of the high street, which also suffered from the effects of the heatwave in the middle of the month.

“Almost every other retail category continued to go backwards. While value sales were almost 6% higher than the previous year - excluding petrol - this was accounted for by inflation. In volume terms, sales actually declined by 3% compared to July 2021.

“This trend was most stark in grocery, which saw double digit growth in value terms - cash in the till - but in volume terms was almost flat. We saw earlier this week that inflation in grocery has soared to its highest level since 2008. As consumers told us in our most recent consumer sentiment survey, they are spending more on groceries, but taking the same amount of shopping home at the end of the day.

“With the prospect of more inflation to come, the concern for retailers is that shoppers will simply have less to spend as the nights draw in. Added to the cost-of-living crisis, the so-called “cost-of-doing-business” crisis is compounding the difficulties faced by retailers up and down the country, as they contend with increasing input, labour and energy costs. The calls for government assistance are only likely to grow in coming months.”

 

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