The Retailer Winter 2018/19

Helen Dickinson OBE, Chief Executive, British Retail Consortium: “Squeezed consumers chose not to splash out this Christmas with retail sales growth stalling for the first time in 28 months. The worst December sales performance in ten years means a challenging start to 2019 for retailers, with Business Rates set to rise once again this year, and the threat of a No-Deal Brexit looming ever larger. “The retail landscape is changing dramatically in the UK, while the trading environment remains tough. Retailers are facing up this challenge but are having to wrestle with

mounting costs from a succession of government policies – from the Apprenticeship Levy, to higher wage costs, to rising business rates. “Retail makes up 5 per cent of the economy, yet pays 10 per cent of all business taxes and 25 per cent of all business rates. This is neither fair nor sustainable. The Government should urgently look into reforming the broken business rates system and champion the future of retail in the UK.”

Shop Price Index: BRC–NIELSEN Shop prices edge upwards, despite discounting Period Covered: 03 - 07 December 2018

• Shop Price inflation accelerated in December to 0.3%, up from 0.1% in November. This is the fourth month of inflation in five years and the highest inflation rate since April 2013. • Non-Food deflation decelerated in December to 0.4% from 0.8% in November. This is the lowest rate of deflation since March 2013. • Food inflation decelerated to 1.5% in December from 1.6% in November. • Fresh Food inflation slowed to 0.9% in December, down from 1.2% in November. • Ambient Food inflation accelerated to 2.3% in December from 2.1% in November. • The easing of Fresh Food inflation is likely to be the first indication of the downward pressures for the category from lower international food prices. Global food prices have started declining (except for Cereals) in May 2018. As it takes about 7 to 10 months for those changes to filter through into final consumer prices, we expect food price increases to subside, notwithstanding political turmoil in the UK. • Non-Food prices stabilised over 2018, leading to a slowing of the rate of deflation of Non-Food prices. This has been the result of both delayed impacts on Non-Food Shop Prices of the post referendum exchange rate adjustment and a change in the promotional strategies deployed by retailers.

Helen Dickinson OBE, Chief Executive, British Retail Consortium: “December’s Shop Price figures only serve to underline how tough conditions are in the retail industry. Despite Non-Food goods being cheaper on average than last year, early indications suggest that retailers faced a challenging environment throughout the festive season. “Shoppers may have become accustomed to great value, but Brexit uncertainty means that a continuation of the low prices is by no means guaranteed. Without a trade deal with the EU, the cost of importing many of the goods we buy day to day will go up significantly and retailers simply do not have the room in their margins to protect consumers from those costs. Unless Parliament comes together behind a deal that ensures frictionless, tariff free trade we could see prices paid by UK households rise substantially.” brc.org.uk/retail-insight-analytics

8 | winter 2019 | the retailer

Made with FlippingBook - professional solution for displaying marketing and sales documents online