Neil Saunders, managing director of retail research agency, Conlumino, has called into question the validity of the latest retail sales figures from the Office of National Statistics (ONS), which show sales values increased by 5.4% and volumes by 0.9% in October 2011 compared to October 2010.
“These figures look unbelievably positive,” said Saunders. “They are completely out of kilter with the results from the high street and yet again call into question the credibility of the ONS when it comes to reporting retail sales.
“October was a challenging month for fashion retailers as unseasonably warm weather pushed down sales of autumn and winter stock, it was also a month of extensive discounting which pushed down the headline inflation rate. Both of these factors would reduce the value of retail sales, so the ONS reporting the highest growth since April – a month boosted by the Royal Wedding and Easter – strains credulity.”
On a sector basis, the ONS said non-specialised stores’ or department stores’ sales volumes increased by 2.3% in October 2011, compared with last year; and household goods stores’ sales volumes increased by 0.3 %.
“On a value basis, the ONS has household goods stores in strong positive territory,” said Saunders. “Most retailers involved in these sectors will be left scratching their heads as to where this growth actually came from. Recent results from Dixons, Comet and Argos have shown trading in this segment of retail is currently torrid,” he said.
“With the economy in a precarious position, it is critical businesses and policy makers have accurate data in order to make the right decisions. At the moment, the ONS does not appear to be living up to those standards and it urgently needs to review both its methodology and way of reporting.”
Compared to September 2011, the ONS said sales volumes increased by 0.6% in October 2011 and value sales rose 0.7%.
It said feedback from retailers suggests the monthly increases were a result of pre-Christmas sales and in-store promotions.