The ONS statistics are expected to show that long Christmas sales and big discounts boosted companies’ profits
4:58am UK, Friday January 20, 2012
High Street retailers enjoyed a growth in sales over the Christmas period – but new figures are expected to show it came at a price.
It is thought the latest Office for National Statistics data will show that while widespread discounting saw bargain hunters flocking to stores, the price-cutting pushed profits down.
Over the past few weeks retailers have reported their own individual figures.
It’s crucial that that online offering has got to work, it’s got to look zingy, it’s got to look as good or better than your competitors. It’s absolutely vital.
Retail analyst Nick Hood
One common theme was the importance of an online presence – those who have exploited the internet to their advantage have been rewarded.
“People go to shops to spend time, not to shop. They do their real shopping, their real, focused shopping online,” says retail analyst Nick Hood.
“It’s crucial that that online offering has got to work, it’s got to look zingy, it’s got to look as good or better than your competitors. It’s absolutely vital.”
The latest ONS figures will reflect a one-off period in the calender. It is often said that if retailers enjoy a good Christmas then January turns out to be quieter.
Earlier in the week, the ONS cited reductions in clothing shops as one factor behind a drop in inflation.
The British Retail Consortium, which publishes its own figures, said recently that like-for-like sales were up 2.2% on last year.
But like-for-like sales do not always tell the true story.
Because of large discounts, stock might have been selling well but not earning the retailers as much money, therefore profits have not been impressive.
The Christmas sales, many of which are still on, cannot continue indefinitely.
They have done their job for many retailers and given a much-needed boost but 2012 will be another tough year like the last, and for some it will inevitably prove too tough.