The latest BRC numbers are being greeted with great relief. See – it’s not as bad as was made out and post-Brexit Britain is thriving, or so it seems. There will be some serious flip-flopping of views over the coming months because these numbers really tell us very little. Indeed, no numbers will be very reliable for some time. We are in a state of flux.
The first half of 2016 has seen retail sales growth by value averaging 1.6% per month. This in itself is some way short of the 3% total cost growth run rate (that’s operating plus product costs) across the industry. And this is all pre referendum. Forget about stats for a moment and just rely on common sense – there must be some delayed purchasing out there and even though this may be relatively peripheral, retail is a volume-sensitive business where small shifts in unit sales have a massive impact on profitability.
It is true that the BRC figures could have been worse but no one should imagine they represent the likely consumer reaction to a post-Brexit retail economy. And no one should ignore the evidence out there in the shops – 70% of total UK retail (food and non-food) is currently on sale. This cannot reflect a healthy market and the real headwinds are already beginning to hit performance. There is more on the way.
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