According to the Office for National Statistics, UK retail sales for August 2014 increased by 3.9%.
“This year-on-year increase is now the 17th month of consecutive year-on-year growth and when
this is coupled with the 18 months of consecutive rolling 3-months on 3-months growth it would
be true to say that the underlying picture is one of growth.”
The quantity bought in household goods stores in August 2014 increased by 12.7% compared with August 2013. This is the largest year-on-year increase in this series since October 2001 (16.2%). The main contribution to this increase in growth was from furniture stores The year-on-year increase of 23.4% in these stores was the largest growth since records began in 1988. Feedback from retailers suggested that this was in part due to better than average sales.
Electrical appliance stores also contributed to the increase in the quantity bought in household goods stores. Feedback from retailers suggested that sales were increased as consumers sought to buy high powered vacuum cleaners before the EU energy saving regulation came into force at the end of August.
However, average store prices fell in August 2014 by 1.2% compared with August 2013, the largest fall since July 2009.
Other key data points from the report include,
The proportion of sales made online fell by 0.2% to account for 11.0% of all sales in August 2014. Despite this fall in the proportion of sales, the amount spent online increased by 8.3% in August 2014 compared with August 2013.
- Average weekly spending online in August 2014 was £707.7 million. This was an increase of 8.3% compared with August 2013.
- The amount spent online accounted for 11.0% of all retail spending excluding automotive fuel, compared with 10.6% in August 2013.
- The online spend in textile, clothing and footwear stores increased by 27.3% year-on-year, feedback from retailers suggested that this was due to orders for children’s fancy dress costumes.
This is clearly good news for retail and demonstrates the continued strengthening of the UK ecconomy. Online sales for August was estimated at more than £2 bn, an increase of 8.3% on August 2013. The only slight concern in the figures for retailers in general, was that average store prices fell by 1.2% over the previous period last year. This suggests that retailers are continuing to feel the pressure to keep prices down, as consumers continue to place value and price high on their list of purchase criteria.
The balance of power continues to shift to consumers. As companies battle for market share consumers have become accustomed to an almost unlimited selection of virtually anything they might want. This coupled with explosive growth of the internet and mobile devices, means consumers now have total access and exert more and more control over the marketplace.
Retailers need to adapt to these changing dynamics in order to compete effectively in their markets and price management will continue to become an important differentiating strategy. Retailers need visibility on market prices and competitor price tracking and product price management tools like Insitetrack can provide a competitive edge.