Blog: UK retailers question latest official sales figures

Dean Best | 18 November 2011

Headlines here in the UK yesterday (17 November) described how there had been a "surprise" jump in the volume of retail sales in the country in October. The data, however, stunned UK retailers, who immediately questioned the figures.

Data from the Office for National Statistics said sales volumes increased 0.9% year-on-year, leading to a 5.4% rise in the value of sales.

The ONS said retailers had told it the increase in sales was due to pre-Christmas sales and in-store promotions.

According to the ONS, food stores saw their volumes increase by 0.3% year-on-year. Food industry commentators and executives have pointed to falling volumes for months and the ONS said the increase was the first since April.

However, the data was cast into doubt by UK retailers association The British Retail Consortium, which said the ONS had painted an "overly positive picture" of trading conditions.

The BRC said its own data had shown that sales had increased by only 1.5% in value terms in October, indicating that volumes were down once inflation was taken into account.

"Most retailers won't recognise the overly positive picture being painted by these ONS results," BRC director general Stephen Robertson said. "The reality is disposable incomes are down on a year ago and customers are cutting back."

He added: "Even food sales are suffering as people cut back or switch to cheaper brands in an effort to balance their household budgets. Stores are competing hard for what customer spending is available but consumers are overwhelmingly gloomy. Sales that happen come at the cost of reduced margins as retailers cut prices while facing higher business costs."

Robertson's comments echo those made by Dalton Philips, the chief executive of the UK's fourth-largest grocer Morrisons, earlier this week.

"It's tough out there. The consumer is feeling really bruised," Philips said. "It's going to be a tough Christmas."

Philips, however, said Morrisons was "well prepared" for one of the most competitive periods of the year and outlined a promotional push that he said would deliver savings of GBP100m.

Nevertheless, you can be sure that rivals Tesco, Asda and Sainsbury's also have their sleeves rolled up, ready for battle.