The British Retail Consortium has said that the UK government should do 'all it can' in forthcoming trade talks with the EU, to ensure that the pain of recent price increases is not accelerated by new tariffs on imports.
The BRC made its call on the back of the publication of the latest Retail Sales Index by the Office of National Statistics, which found that fourth quarter retail sales in the UK gained just 0.4%, while the yearly gain of 1.9% was the lowers in four years.
Volume Declines
While sales in value terms were holding up in December, volume sales were down, which Rachel Lund, Head of Retail Insight & Analytics at the BRC said was partly due to a shift in spending into November, as a result of Black Friday.
"However, the overall picture is of weak growth in quantities sold, which is not great for consumers and means downward pressure on GDP figures will continue," she said. "Inflation has meant household budgets simply aren’t stretching as far, particularly in the case of food shopping. Heavy discounting in non-food products in the few weeks before Christmas helped shoppers bag a bargain on last minute Christmas gifts, boosting volumes a little at the expense of retailers’ margins, but that did little to change the overall picture.
"While the inflationary impact on spending may subside a little bit this year, households may see little by way of a return to growth in their real spending power. With that in mind the Government should do all it can in the forthcoming trade talks to ensure the pain of price increases is not further added to by new tariffs on imports."
A Bad Year
According to the ONS data, the decline in shop sales in December means that 2017 was the worst year for British retail since 2013.
Retail sales dropped 1.5% month-on-month from November, which was well below economic forecasts. As a result of the ONS data, the pound slipped back against the dollar last Friday.
“The longer-term picture is one of slowing growth, with increased prices squeezing people’s spending,” commented ONS statistician Rhian Murphy.
© 2018 European Supermarket Magazine – your source for the latest retail news. Article by Stephen Wynne-Jones. Click subscribe to sign up to ESM: The European Supermarket Magazine.
