Yesterday the BRC told us January 2017 saw headline retail sales struggle and just about register a faintly positive 0.1% YOY growth. LFLs were down 0.6%. This followed the December ONS retail figures showing the industry enjoying booming sales growth. In fact Christmas 2016 was the third consecutive month of incredible retail sales growth numbers from the ONS. Literally incredible, in the sense of being totally unbelievable. It seems this fantastic growth is being driven by small retailers and pure play online. And butchers are having a phenomenal time too.
Are you confused? I know I am. I clearly spend too much time talking to the wrong retailers because I’m struggling to find anyone at all that is having a great, or even moderate, time. And the retail stats are permeating the wider world. The Bank of England just increased its UK GDP forecast for 2017 from 1.4% to 2.0%, largely driven by the consumer economy whose largest component is of course retailing. This is a massive upgrade suggesting a very dramatic shift in view.
The BRC’s numbers are vastly more consistent with the anecdotal view I gather from talking to retail leadership teams across the industry. When it comes to planning, budgeting and forecasting, I would caution people to ignore the ONS data until they sort out what has gone badly wrong. And the Bank of England would be well advised to revisit its incredibly bullish view of the UK economy using base data more in tune with reality.
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