Deloitte: High Street Retailers Lost Their Edge to Online Traders, Residential Area Stores Last Christmas
Reporting on the figures of retail sales based on the record of the Office of National Statistics, Deloitte admitted it was having a difficult time reading the Christmas trading statements of many retailers that were severely hit by the weather in December.
“Today’s figures undoubtedly reflect the impact of the severe weather that struck most of the country last month,” Strategic Retail Adviser at Deloitte Richard Hyman said. He stressed that the bad weather last month had forced consumers to content themselves with online shopping and stores located near their residential areas, leaving those in the high streets with scarce visitors.
Hyman said their estimation was that approximately “£750m of retail spend was taken out of the market as a result of the snow.”
“With limited time available, it appears some retailers benefited from consumers choosing to do more of their shopping in fewer stores,” he added.
According to him, high street retailers have essentially lost “a useful boost” at the advent of 2011, with the stubborn increase in VAT and the imminent rise in inflation rate which is likely to bring about an unwanted increase in interest rates.
Economists from Ernst & Young ITEM Club released predictions early this week projecting the inflation rate to skyrocket to 4 percent in February aided by the spending cuts in government and VAT and commodity price increases. Despite the report, the company has warned the Bank of England that raising interest rates along with inflation would seriously harm the economy.
“This Christmas was all about convenience and in particular, those retailers with multi-channel operations (online and stores) performed strongly,” Ian Geddes, UK Head of Retail at Deloitte, said.
Geddes noted that grocery stores near residential areas in particular have had better figures than high-street retailers have in last Christmas’s trading. He also said that online retailers had managed to cast away doubts from consumers that they might not deliver the orders on time given the weather, saying their overall growth is likely to turn out double-digits.