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Consumer jitters hit retail sales growth

Posted at December 31, 2014 | By : | Categories : News | 0 Comment

Retail sales are predicted to grow by 2% at most in 2015, as consumer confidence remains fragile.

The warning comes from the KPMG/Ipsos Retail Think Tank which reckons that political uncertainty remains a real risk to consumer confidence, with a general election and turmoil in the Eurozone expected to cause significant jitters.

A possible rise in interest rates and VAT could also hit consumers’ ability to spend in the year ahead.

According to the analysis, food sales will remain in negative territory in 2015, constrained by price deflation and changes in shopping practices by consumers.

At the same time, online sales growth will exacerbate profitability problems making 2015 an “incredibly expensive” year for retailers as ever increasing online orders inflate the overall “cost to serve”.

Commenting on the findings, Martin Newman of e-commerce consultancy, Practicology, says: “Domestic retailers also need to brace themselves for competition from overseas to start invading the online arena. Many US brands are investing to make their ecommerce propositions to the UK more competitive, as are European retailers such as Zalando. And 2015 could see Chinese ecommerce giants – including Alibaba – throw themselves into the mix.”

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