Retail Expenditure Guide 2015/2016

Transcription

Retail Expenditure Guide
Covering the 2014 - Based Expenditure Release
Map Intelligence SP
2015/2016
Product Guide
Information in this document is subject to change without notice and does not represent a commitment on
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August 2015
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Table of Contents
Chapter 1: Introduction ............................................................................................................................. 5
Introduction ........................................................................................................................................... 6
Chapter 2: Consumer Retail Spending Estimates ................................................................................... 8
The Estimates - What is Available? ....................................................................................................... 9
Methodology - How They Are Produced ............................................................................................. 12
Alcohol and Tobacco Expenditure ............................................................................................................ 12
Regional Expenditure Estimates ............................................................................................................... 12
Local Area Expenditure Estimates ........................................................................................................... 13
Detailed Category Definitions ............................................................................................................. 15
Food ............................................................................................................................................................... 15
Alcoholic Drink ............................................................................................................................................ 15
Tobacco ........................................................................................................................................................ 15
Books, Newspapers and Magazines ......................................................................................................... 15
Footwear ....................................................................................................................................................... 15
Clothing ......................................................................................................................................................... 16
Furniture, Floor Coverings and Household Textiles .............................................................................. 16
Audio-Visual Equipment and Other Durable Goods .............................................................................. 16
Hardware and DIY Supplies ....................................................................................................................... 17
Other Goods ................................................................................................................................................. 18
Bulky Goods ................................................................................................................................................. 20
Total DIY Related Goods............................................................................................................................. 20
Leisure Goods and Services Expenditure .......................................................................................... 20
Detailed Category Definitions.................................................................................................................... 21
Other Expenditure Categories ............................................................................................................ 21
Detailed Category Definitions.................................................................................................................... 22
Time Series Estimates ......................................................................................................................... 23
Chapter 3: Using the Retail Spending Estimates ................................................................................... 24
Recent Trends ...................................................................................................................................... 25
Longer-run Trends ............................................................................................................................... 25
Oxford Economics' Forecasts ............................................................................................................. 27
Trend Projections ................................................................................................................................ 28
Prices ................................................................................................................................................... 34
Special Forms of Trading .................................................................................................................... 35
Data Issues ................................................................................................................................................... 35
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Breakdowns and Projections .................................................................................................................... 37
Chapter 4: Retail Business Turnover Potential ...................................................................................... 40
The Estimates - What is Available? .................................................................................................... 41
Methodology - How They Are Produced............................................................................................. 41
Detailed Category Definitions ............................................................................................................. 42
Chapter 5: Using the Retail Business Turnover Potential Estimates.................................................... 46
Estimates of Earlier Data..................................................................................................................... 47
Recent Trends ..................................................................................................................................... 47
Longer-Run Trends ............................................................................................................................. 47
Trend Projections ................................................................................................................................ 50
Prices ................................................................................................................................................... 57
Appendix A: Base Area Profile Report ................................................................................................... 58
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1
Chapter 1: Introduction
In this Chapter:
 Introduction
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Introduction
Pitney Bowes Consumer Retail Expenditure estimates for small areas have been compiled by
Oxford Economics in association with Pitney Bowes Corporation to meet the requirements of retail
and market planners and analysts for comprehensive, accurate and up to date information about
the patterns of expenditure in small local market areas. This guide describes the 2014-based
estimates, projections and forecasts. These are fully consistent with the latest official ONS
estimates of consumer spending in the UK1.
Consumer Retail Expenditure estimates are also available as data sets for all Census Output Areas
and postcode sectors in the United Kingdom, totalling approximately 223,000 Output Areas and
9,500 postcode sectors. For any of these options contact Pitney Bowes Corporation.
Area profiles reports may be defined in terms of Census or postal geography, or as custom areas
such as mapped or digitised areas, polygon boundary files or drive time isochrones. The size of the
area can range from a few Census Output Areas, representing the walk-in catchment of a small
corner store, to a four hour drive time isochrone for a new leisure development - or even larger.
For each area, information is provided on the total expenditure generated by the resident
population and households of the area, the average expenditure per household in the area, and the
average expenditure per person in the area. Expenditure is presented in detailed commodity
(goods) categories and aggregated to convenience and comparison goods summary categories.
The baseline consumer spending estimates and forecasts are currently available for the period of
2013-2026 in constant 2014 prices. The 2013 and 2014 estimates are consistent at the national
level with the data published by the ONS. The forecast are taken from Oxford Economics published
UK Macroeconomic forecasts and the local level estimates are modelled using various elements of
the Economics Regional and Local forecasting services together with additional ONS data. The
result is much more targeted to the prospects for a particular locality than simply taking the latest
expenditure estimates for the area and growing them in line with national trend-based projections
for the appropriate category of goods. This is partly because our consumer spending forecasts
enable us to take account of changes in the underlying forces driving different elements of
consumer spending in a much more sophisticated way than simply extrapolating trends. However,
equally importantly, Oxford Economics’ regional forecasts allow us to take account of how
underlying differences in economic performance in different parts of the country are likely to affect
relative spending power in different locations. Please contact Pitney Bowes if you would like more
information on this.
1
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The data available and in this Guide is consistent with ONS estimates released in June 2015.
Note that all Consumer Retail Expenditure estimates apply strictly to the area for which they were
produced, and reflect the socio-economic characteristics of that area. The use of expenditure per
household or expenditure per capita estimates to assess the consumer retail expenditure in other
areas is not recommended. Any estimates obtained in this way are unlikely to correctly reflect the
socio-economic characteristics of the new area.
The following chapters set out the steps that are involved in producing the estimates, which are
designed to take the best possible account of available data on the overall spending patterns and
how these will vary in different places. In summary:
 The methodology ensures full consistency with key primary data sources - Census, National
Accounts, Living Costs and Food Survey, Annual Survey of Hours and Earnings.
 Spending patterns are derived from the relative affluence of different areas, which is linked
directly to Census data on occupational mix and employment rates.
 The methodology also reflects estimated income variation arising from differences in average
earnings between areas for a given occupation, as well as differences in the mix of
occupations between areas.
Following past practice, we have produced a number of "trend-based" projections of retail
expenditure per head at the national level (see Chapter 3). These are based on simple time trends
fitted over varying periods. The Oxford Economic forecasts, by contrast, are our "best" estimate of
future changes. "Trend-based" projections are provided for users who prefer a value-free guide to
future changes.
The rest of this guide is structured as follows:
 Chapter 2 explains the retail spending estimates in more detail, setting out the definitions
they are based on and the methodology used to produce them.
 Chapter 3 provides information on using the retail spending estimates, including projecting
them into the future and allowing for special forms of trading (non-store sales).
 Similarly, Chapter 4 explains our estimates of retail business turnover potential, while
Chapter 5 provides an overview of our projections and forecasts.
 An Appendix provides an Area Profile Report for the UK as a whole, giving baseline data for
spending by category.
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2
Chapter 2: Consumer Retail
Spending Estimates
In this chapter:
 The Estimates - What is Available?
9
 Methodology - How They are Produced
12
 Detailed Category Definitions
15
 Leisure Goods and Services Expenditure
20
 Other Expenditure Categories
21
 Time Series Estimates
23
The Estimates - What is Available?
Consumer retail spending estimates are available for the following main categories (COICOP2
references in brackets).
Convenience Goods:
 Food and non-alcoholic beverages (01)
 Alcoholic drink (off-licence sales) (02.1)
 Tobacco (02.2)
 Non-durable household goods (05.6.1)
 Newspapers and magazines (09.5.2)
Comparison Goods:
 Books (09.5.1)
 Clothing and footwear (03)
 Furniture, floor coverings and household textiles (05.1.1, 05.1.2, 05.2)
 Audio-visual equipment and other durable goods (05.3.1, 05.3.2, 05.4, 05.5, 08.2, 09.1)
 Hardware and DIY supplies (04.3.1)
 Chemists' goods (06.1, 12.1.2, 12.1.3)
 Jewellery, watches and clocks (12.3.1)
 Bicycles (07.1.3)
 Recreational and other miscellaneous goods (09.2.2, 09.3, 09.5.3, 09.5.4, 12.3.2)
These definitions of convenience and comparison goods categories conform to the definitions in
general use by retail planners. Table 2.1 below provides more information on these categories,
while the third section of this chapter provides a full listing of the goods covered in each category.
All estimates are inclusive of VAT and Special Forms of Trading.
Estimates and projections are available for individual Output Areas and for aggregated
geographies based on these, for the period of 2013-26 in constant 2014 prices.
2
The classification system for consumption by purpose, used by the ONS and internationally
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Table 2.1 Expenditure Categories
10
Pitney Bowes Goods Category
Consumer Trends COICOP Categories
1.
Food
01.1.1 Bread and Cereals
01.1.2 Meat
01.1.3 Fish
01.1.4 Milk, Cheese and eggs
01.1.5 Oils and fats
01.1.6 Fruits
01.1.7 Vegetables
01.1.8 Sugar and sweet products
01.1.9 Food products n.e.c
01.2.1Coffee,tea and cocoa
01.2.2 Mineral water and soft drinks
2.
Alcoholic drink
02.1.1 Spirits
02.1.2 Wine
02.1.3 Beers
3.
Tobacco
02.2 Tobacco
4.1
Books
09.5.1 Books
4.2
Newspapers and magazines
09.5.2 Newspaper and periodicals
5.1
Footwear
03.2.1 Shoes and other footwear
03.2.2 Repair and hire of clothing
5.2
Clothing
03.1.1 Clothing materials
03.1.2 Garments
03.1.3 Other articles of
clothing/accessories
03.1.4 Cleaning, repair and hire of clothing
6.1
Furniture and floor coverings
05.1.1 Furniture and furnishings
05.1.2 Carpets and other floor coverings
6.2
Household textiles and soft furnishings
05.2 Household textiles
7.1
Domestic appliances
05.3.1 Major household appliances
05.3.2 Small electric household
appliances
7.2
Audio -visual, photo graphics and
optical goods
09.1.1 Audio visual equipment
09.1.2 Photographic and optical
equipment
09.1.3 Information processing equipment
09.1.4 Recording media
Pitney Bowes Goods Category
7.3
Telephone and fax equipments
08.2 Telephone and fax equipment
8.1
China, glass and utensils
05.4 Household utensils
8.2
DIY and decorator’s supplies
04.3.1 Materials for maintenance and
repair of the dwelling
8.3
Tools and equipment for house and
garden
05.5.1 Major tools and equipments
05.5.2 Small tools and minor accessories
8.4
Gardens, plants and flowers
09.3.3 Gardens, plants and flowers
9.1
Chemists’ Goods
06.1.1 Pharmaceutical products
06.1.2 Other medical products
06.1.3 Therapeutic equipment
12.1.2 Electric appliances for personal
care
12.1.3 Other products for personal care
9.2
Jewellery, watches and clocks
12.3.1 Jewellery, watches and clocks
9.3
Non-durable household goods
05.6.1 Non-durable household goods
9.4
Bicycles
07.1.3 Bicycles
9.5
Recreational goods
09.2.2 Musical instruments and major
durables for indoor recreation
09.3.1 Games, toys and hobbies
09.3.2 Sports, camping and open-air
recreation equipment
09.3.4 Pets and related products
9.6
Other miscellaneous goods
09.5.3 Miscellaneous printed matter
09.5.4 Stationery and drawing materials
12.3.2 Other personal effects
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Methodology - How They Are Produced
National Expenditure Estimates
These are derived directly from official statistics, published by the Office for National Statistics
(ONS) in Consumer Trends. This provides a detailed breakdown of UK consumer spending,
consistent with the UK National Accounts, classified according to the COICOP system, from
which we extract those categories of consumers' expenditure that are relevant to retail
spending. The Consumer Trends estimates (which subsequently appear in the Blue Book)
provide the most reliable source of information on consumer retail expenditure, since it draws
upon a wide range of sources, including the ONS Living Costs and Food Survey (published as
Family Spending), the ONS Annual Business Survey (ABS), the Retail Sales Inquiry (RSI),
government departments, nationalised industries and manufacturers.
The Consumer Trends data includes spending in all types of retail outlets, comprising all
permanent and temporary shops, markets, roadside stalls, mobile shops, farm shops,
roundsmen operating from depots, party plan, automatic vending machines and credit traders. It
also includes non-store retailing, such as internet sales and mail order.
The ONS estimates exclude spending by UK residents' abroad and are further adjusted by
Oxford Economics to exclude spending by overseas visitors in UK retail outlets.
Consumer retail expenditure per capita is obtained by dividing the resulting expenditure by goods
type by the latest ONS estimates of mid-year home population for the United Kingdom, as
published in the ONS Population Trends.
Alcohol and Tobacco Expenditure
Data for both alcohol and tobacco are distorted by estimates of smuggled goods that are
included in the official data. These should not be included in convenience good expenditure. In
Consumer Trends, National Statistics published estimates of smuggling for these goods.
Alcohol smuggling only represents a small share of the total spending, with no split available for
on and off-licence sales.
Tobacco smuggling is more important, representing over 16% of total sales in 2008 - and has
been increasing over the past decade. Data supplied on smuggling for 1994 to 2010 have been
subtracted from total spending, with a suitable share of total tobacco spending also subtracted
for other years. Even after this adjustment for smuggling, expenditure on tobacco appears to be
too large. This still includes both retail and non-retail spending. Only the retail element is
required. ABS data on retail turnover by commodity closely match other elements of spending
defined on the COICOP system. The clear exception is for tobacco. Looking at the ABS data
over a number of years suggests that only around 60% of the COICOP spending on tobacco,
net of smuggling, is in retail establishments. The remainder is non-retail spending and has been
removed from calculation.
Regional Expenditure Estimates
Although the main focus of the expenditure estimates is at the UK and local levels, the
availability of spending data at the regional level from the Living Costs and Foods Survey (LCFS
– formerly the Expenditure and Food Survey) makes these an important element of the process,
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and are used as control totals for the sum of spending across all Output Areas in a given region
for a particular component of spending.
Since the 2013/2014 edition of the report, the shares of regional total spending are taken from
the LCFS and applied to the UK total consumer spending from the National Accounts. One of
the main advantages of using the LCFS estimates for total regional consumption is that they are
consistent with the data used for splitting out the detailed spending categories within regions, as
described below. Total regional consumption forecasts are driven by Oxford Economics’
regional income forecasts and spending ratios (the inverse of savings ratios).
As a first approximation of regional spending patterns, shares of UK spending on detailed goods
categories are applied to the total spending by region. This gives spending by region by
category with the assumption that all regions share the national spending profile. Estimates are
then further refined by applying differences in regional patterns taken from the LCFS, the latest
survey reports these detailed regional spending patterns for 2011-2013. Using this source,
spending on a category in a region relative to the UK as a whole is calculated, and this ratio is
applied to the regional shares produced earlier. As a final step, spending is scaled across
regions to ensure that total spending on each goods category adds up to the UK total.
Local Area Expenditure Estimates
Expenditure on different commodities at the Output Area level is estimated through a
combination of:
 The number of people living in the OA, broken down by broad age group, economic
status and occupation.
 Data on different average income levels for these different groups.
 Information on how spending patterns differ across different socio-economic groups.
Local Area Expenditure Estimates - Population
Population data are taken from the Pitney Bowes 2015 released Population estimates
and projections, derived from the official 2011 Census Data and Mid-Year estimates, including a
split into young (less than 16), working age (16-59 or 64) and pensioners where available.
Local Area Expenditure Estimates - Employment
Employment by occupational group, using the National Statistics Socio-economic Classification
(NS-SEC) which includes unemployment, and economic inactivity, is taken from the Census.
Figures are scaled where necessary to ensure consistency with working age population.
Local Area Expenditure Estimates - Incomes
Average incomes for different occupations in different parts of the country are derived from a
number of sources. These include: Regional Gross Disposable Household Income providing details of
disposable income at NUTS3 level, Annual Survey of Hours and Earnings which provides detailed
earnings by occupation at regional level and more summary information at Local Authority
District level. We have also used more detailed information available from GLA on income at
lower super output area (LSOA) level. These are combined with income estimates for different
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socio-economic groups taken from the LCFS and applied to the distribution of social-economic
groups at the output area taken from the census. Average incomes for the unemployed,
economically inactive and pensioners are derived from the LCFS.
Local Area Expenditure Estimates - Spending Patterns
The Living Costs and Food Survey (LCFC) (formerly the Expenditure and Food Survey and
before that the Family Expenditure Survey) shows proportions of income spent on different
goods by different types of households. Specifically, we apply spending patterns for different
socio-economic groups to incomes of different broad occupations in each Output Area, plus
spending patterns of unemployed and pensioners.
For output areas with relatively high or low numbers of children in the population, we also make
an allowance for differences in spending patterns between households with and without
children.
Local Area Expenditure Estimates - Scaling and Aggregation
Estimates are scaled where necessary to ensure consistency with estimates at regional level on
the amount of spending on different goods (derived as discussed previously).
Intermediate geographies are calculated by adding up the appropriate Output Areas into:
 Wards
 Local authorities
 Counties/unitary authorities
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Detailed Retail Category Definitions
Pitney Bowes Consumer Retail Expenditure estimates for small areas provide details of
expenditure, inclusive of VAT and special forms of trading, by 19 detailed goods categories grouped
under six broad headings and three summary headings. Expenditure is aggregated into a total
Convenience goods category, a total Comparison goods category, and an overall Total expenditure
category.
The detailed goods categories are based on the COICOP categories used in ONS Consumer
Trends. A description of each of the detailed categories is given below. The broad categories are
simply combinations of the appropriate detailed categories.
Food
All food and non-alcoholic beverages bought by households for consumption at home. Personal expenditure
on food and drink from catering establishments for consumption on or off the premises is excluded. Thus
expenditure at cafes, restaurants, hotels, fish and chip shops, fast food outlets, canteens, office dining rooms,
schools and communal establishments is excluded. Personal expenditure on food from vending machines and
from catering services is also excluded.
Alcoholic Drink
All alcoholic drink bought by consumers from retail outlets, wine and spirit merchants, and off- licences for
consumption at home. Low or non-alcoholic beverages that are generally alcoholic, such as non-alcoholic
beer, are included in this category. Alcoholic drink for immediate consumption from non-retail outlets such as
public houses, hotels, restaurants, other commercial catering establishments and non-profit making clubs is
excluded.
Tobacco
All consumer expenditure on tobacco products in retail outlets.
Books, Newspapers and Magazines
Books
All consumer retail expenditure on books, including atlases, dictionaries, encyclopaedias, textbooks,
guidebooks and musical scores; scrapbooks and albums for children; and bookbinding costs. Pre- recorded
tapes and compact discs of novels, plays, poetry, etc. and pre-recorded diskettes and CD- ROMs containing
books, dictionaries, encyclopaedias, foreign language trainers, etc. in the form of software (see Audio-Visual
Equipment, Photographic and Optical Goods); and stamp albums (see Recreational Goods and Other
Miscellaneous Goods) are excluded.
Newspapers and Magazines
All consumer retail expenditure on newspapers, magazines and other periodicals. Expenditure on maps and
globes (see Recreational Goods and Other Miscellaneous Goods) is excluded.
Footwear
All consumer retail expenditure on shoes and other footwear (including boots, slippers, etc. but excluding
orthopaedic footwear, which is included under Chemists' Goods); sports footwear suitable for everyday or
leisure wear (but excluding game-specific footwear such as ski boots, football boots, golfing shoes and other
15
such footwear fitted with ice-skates, rollers, spikes, studs, etc., which is included under Recreational Goods
and Other Miscellaneous Goods); gaiters, leggings and similar articles (but excluding shin-guards, cricket
pads and other such protective apparel for sport, which are included under Recreational Goods and Other
Miscellaneous Goods); shoelaces; parts of footwear, such as heels, soles, etc., purchased by households with
the intention of repairing footwear themselves; and repair and hire of footwear. Hosiery and babies' bootees
made of fabric are excluded (included under Clothing).
Clothing
All consumer expenditure on garments for men, women, children (3 to 13 years) and infants (0 to 2 years),
either ready-to-wear or made-to-measure, in all materials (including leather, furs, plastics and rubber), for
everyday wear, for sport or for work. Includes hosiery (excluding medical hosiery, which is included under
Chemists' Goods) and underwear; ties, handkerchiefs, scarves, squares, gloves (including gardening gloves
and working gloves, but excluding rubber gloves, which are included under Non-Durable Household Goods),
mittens, muffs, belts, braces, aprons, smocks, bibs, sleeve protectors, hats, caps, berets, bonnets, etc.;
clothing materials, knitting yarns, sewing threads and dressmaking notions (buckles, ribbons etc.). Also
includes cleaning, repair and hire of clothing. Does not include protective gear for sports (see Recreational
Goods and Other Miscellaneous Goods), but does include cycle and motorcycle helmets. All babies' nappies
(included under Chemists' Goods) are also excluded.
Furniture, Floor Coverings and Household Textiles
Furniture and Floor Coverings
All consumer retail expenditure on beds, sofas, couches, tables, chairs, cupboards, chests of drawers and
bookshelves; baby furniture such as cradles, high chairs and playpens (but excluding carrycots, pushchairs
etc. which are included under Recreational Goods and Other Miscellaneous Goods); base mattresses and
mattresses (but not futons, which are included under Household Textiles and Soft Furnishings); pictures,
sculptures, engravings, tapestries and other art objects including reproductions of works of art and other
ornaments (but excluding works of art and antique furniture acquired primarily as stores of value); lighting
equipment such as ceiling lights, standard lamps, globe lights and bedside lamps; screens, folding partitions
and other furniture and fixtures; bathroom cabinets; blinds (non-fabric); camping and garden furniture;
mirrors, candle holders and candlesticks; loose carpets, fitted carpets, linoleum and other such floor
coverings (but excluding bathroom mats, rush mats and doormats, which are included under Household
Textiles and Soft Furnishings, and antique floor coverings acquired primarily as stores of value). Includes
the delivery and installation of furniture and fixture when applicable, and the laying of floor coverings.
Household Textiles and Soft Furnishings
All consumer retail expenditure on bed linen such as sheets, pillowcases, blankets, travelling rugs, plaids,
eiderdowns, counterpanes and mosquito nets (but excluding electric blankets, which are included under
Domestic Appliances); bedding such as futons, pillows, bolsters and hammocks (but excluding mattresses,
which are included under Furniture and Floor Coverings; air mattresses and sleeping bags, which are
included under Recreational Goods and Other Miscellaneous Goods); furnishing fabrics, curtain material,
curtains, double curtains, awnings, door curtains and fabric blinds; table linen and bathroom linen such as
tablecloths, table napkins, towels and face cloths; other household textiles such as shopping bags, laundry
bags, shoe bags, covers for clothes and furniture, flags, sunshades, etc.; cloth bought by the piece (but
excluding Clothing materials, which are included under Clothing); oilcloth; bathroom mats, rush mats and
doormats; and the repair of the above articles. Fabric wall coverings (see DIY and Decorators' Supplies) and
tapestries (see Furniture and Floor Coverings) are excluded.
Audio-Visual Equipment and Other Durable Goods
Domestic Appliances
All consumer retail expenditure on domestic electrical and gas appliances, such as washing machines,
dryers, drying cabinets, dishwashers, ironing and pressing machines; cookers, spit roasters, hobs, ranges,
ovens and microwave ovens; refrigerators, freezers and fridge-freezers; vacuum cleaners, steam-cleaning
machines, carpet shampooing machines and machines for scrubbing, waxing and polishing floors; other
major household appliances such as safes, sewing machines, knitting machines, water softeners, etc.; air-
16
conditioners, humidifiers, space heaters, water heaters, ventilators and extractor hoods; coffee mills, coffeemakers, juice extractors, can- openers, food mixers, deep fryers, meat grills, knives, toasters, ice cream
makers, sorbet makers, yoghurt makers, hotplates, irons, kettles, fans, electric blankets, etc. includes
delivery and installation of the appliances when applicable. Audio-visual equipment (see Audio-Visual
Equipment, Photographic and Optical Goods); non-electric household scales (see China, Glass and
Utensils); non-electric personal weighing machines and baby scales (see Chemists' Goods); and power
tools and lawnmowers (see China, Glass and Utensils) are excluded, as are appliances that are built into the
structure of the building.
Audio-Visual Equipment, Photographic and Optical Goods
All consumer retail expenditure on radio sets, car radios, radio clocks, two-way radios, amateur radio
receivers and transmitters; television sets, video cassette players and recorders, television aerials of all
types; gramophones, tape players and recorders, cassette players and recorders, CD-players, personal
stereos, stereo systems and their constituent units (turntables, tuners, amplifiers, speakers, etc.),
microphones and earphones; personal computers, visual display units, printers and miscellaneous
accessories accompanying them; computer software packages such as operating systems, applications,
languages, etc.; telefax and telephone-answering facilities provided by personal computers; calculators,
including pocket calculators; typewriters and word processors; still cameras, movie cameras and soundrecording cameras, video cameras and camcorders, film and slide projectors, enlargers and film processing
equipment, accessories (screens, viewers, lenses, flash attachments, filters, exposure meters, etc.);
binoculars, microscopes, telescopes and compasses. Also includes pre-recorded and blank media such as
records and compact discs; pre-recorded and unrecorded tapes, cassettes, video cassettes, diskettes and
CD-ROMs for tape recorders, cassette recorders, video recorders and personal computers; unexposed films
(including processing costs where included), cartridges and disks for photographic and cinematographic
use; and photographic supplies such as paper and flashbulbs. Excludes video game software, video game
cassettes and video game CD-ROMs, video game computers that plug into a television set, typewriter
ribbons, toner and ink cartridges, slide rules, non-prescription sunglasses, and musical instruments (see
Recreational Goods and Other Miscellaneous Goods); prescription and non-prescription spectacles, and
contact lenses (see Chemists' Goods); batteries (see China, Glass and Utensils); and development of films
and printing of photographs where not included in the price of the film.
Telephone and Fax Equipment
All consumer retail expenditure on telephones, radiotelephones, telefax machines, telephone- answering
machines and telephone loudspeakers; and the repair of such equipment. Telefax and telephone-answering
facilities provided by personal computers (see Audio-Visual Equipment, Photographic and Optical Goods)
are excluded.
Hardware and DIY Supplies
China, Glass and Utensils
All consumer retail expenditure on glassware, crystal ware, ceramic ware and chinaware of the kind used for
table, kitchen, bathroom, toilet, office and indoor decoration; cutlery, flatware and silverware; non-electric
kitchen utensils of all materials such as saucepans, stew pots and pressure cookers, frying pans, coffee
mills, puree makers, mincers, hotplates, household scales and other such mechanical devices; non-electric
household articles of all materials such as containers for bread, coffee, spices etc., waste bins, waste paper
baskets, laundry baskets, portable money boxes and strong boxes, towel rails, bottle racks, irons and ironing
boards, letter boxes, feeding bottles, thermos flasks and ice boxes.
DIY and Decorators' Supplies
All consumer retail expenditure on products such and materials such as renderings, wallpapers, fabric wall
coverings, plaster, cement, putty, wallpaper pastes etc,, purchased for minor maintenance and repair of the
dwelling; small plumbing items (pipes, taps, joints etc.); window panes; paint and varnishes; surfacing
material (floorboards, ceramic tiles, etc.); and brushes and scrapers for paint, varnish and wallpaper.
Excludes hand tools, door fittings, power sockets, wiring flex and lamp bulbs (see Tools and Equipment for
House and Garden); lighting equipment such as ceiling lights, standard lamps, globe lights and bedside
lamps (see Furniture and Floor Coverings); and products, materials and fixtures used for major maintenance
and repair or for extension and conversion of the dwelling.
17
NOTE: From June 2013 maintenance and repairs expenditure in owner-occupied dwellings is included in
imputed rentals category; more information on this is available from the link below:
http://www.ons.gov.uk/ons/rel/consumer-trends/consumer-trends/q1-2013/blue-book-2013--improvementsto-household-expenditure-estimates.html#tab-Improvements-to-sources-and-methods
Tools and Equipment for House and Garden
All consumer retail expenditure on motorized tools and equipment such as electric drills, saws, sanders and
hedge cutters, garden tractors, lawnmowers, cultivators, chainsaws and water pumps; garden tools such as
wheelbarrows, watering cans, hoses, spades, shovels, rakes, forks, scythes, sickles and secateurs; hand
tools such as saws, hammers, screwdrivers, wrenches, spanners, pliers, trimming knives, rasps and files;
ladders and steps; charges for leasing or rental of DIY machinery and equipment; door fittings (hinges,
handles and locks), fittings for radiators and fireplaces, other metal articles for the house (curtain rails,
carpet rods, hooks etc) or for the garden (chains, grids, stakes and hoop segments for fencing and
bordering); small electrical accessories such as power sockets, switches, wiring flex, electric bulbs,
fluorescent lighting tubes, torches, flashlights, hand lamps, electric batteries for general use, bells and
alarms.
Gardens, Plants and Flowers
All consumer retail expenditure on natural or artificial flowers and foliage, plants, shrubs, bulbs, tubers,
seeds, fertilizers, composts, garden peat, turf for lawns, specially treated soils for ornamental gardens,
horticultural preparations, pots and pot holders (but excluding garden tools and equipment, which are
included under Tools and Equipment for House and Garden, gardening gloves, which are included under
Clothing, and garden furniture, which is included under Furniture and Floor Coverings), natural and artificial
Christmas trees; delivery charges for flowers and plants.
Other Goods
Chemists' Goods
All consumer retail expenditure on prescription and non-prescription medicinal preparations, medicinal
drugs, patent medicines, serums and vaccines, vitamins and minerals, cod liver oil and halibut liver oil, oral
contraceptives; clinical thermometers, adhesive and non-adhesive bandages, hypodermic syringes, first-aid
kits, hot-water bottles and ice bags, medical hosiery items such as elasticated stockings and knee supports,
pregnancy tests, condoms and other non-oral contraceptive devices; corrective eyeglasses and contact
lenses, hearing aids, glass eyes, artificial limbs and other prosthetic devices, orthopaedic braces and
supports, orthopaedic footwear, surgical belts, trusses and supports, neck braces, medical massage
equipment and health lamps, powered and unpowered wheelchairs and invalid carriages, "special" beds,
crutches, electronic and other devices for monitoring blood pressure, etc., dentures (excluding fitting costs),
and the repair of such articles; electric razors and hair trimmers, hand-held and hood hairdryers, curling
tongs and styling combs, sunlamps, vibrators, electric toothbrushes and other electric appliances for dental
hygiene, etc., and the repair of such articles; non-electric appliances: razors and hair trimmers and blades
therefore, scissors, nail files, combs, shaving brushes, hairbrushes, toothbrushes, nail brushes, hairpins,
curlers, personal weighing machines, baby scales, etc.; articles for personal hygiene: toilet soap, medicinal
soap, cleansing oil and milk, shaving soap, shaving cream and foam, toothpaste, etc.; toilet paper, paper
handkerchiefs, paper towels, sanitary towels, cotton wool, cotton tops, babies' napkins (nappies), toilet
sponges, etc.; beauty products such as lipstick, nail varnish, make- up and make-up removal products
(including powder compacts, brushes and powder puffs), hair lacquers and lotions, pre-shave and aftershave products, sunbathing products, hair removers, perfumes and toilet waters, personal deodorants, bath
products, etc. Excludes protective goggles, belts and supports for sport, and sunglasses not fitted with
corrective lenses (see Recreational Goods and Other Miscellaneous Goods); handkerchiefs made of fabric
(see Clothing); and the hire of therapeutic equipment.
Jewellery, Silverware, Watches and Clocks
All consumer retail expenditure on precious stones and metals and jewellery fashioned out of such stones
and metals; costume jewellery, cuff links and tiepins; clocks, watches, stopwatches, alarm clocks, travel
clocks; and the repair of such articles. Excludes silverware (see China, Glass and Utensils); radio clocks
(see Audio-Visual Equipment, Photographic and Optical Goods); wall thermometers and barometers (see
18
Recreational Goods and Other Miscellaneous Goods); and precious stones and metals and jewellery
fashioned out of such stones and metals acquired primarily as stores of value.
Non-Durable Household Goods
All consumer retail expenditure on cleaning and maintenance products such as soaps, washing powders,
washing liquids, scouring powders, detergents, disinfectant bleaches, softeners, conditioners, windowcleaning products, waxes, polishes, dyes, unblocking agents, disinfectants, insecticides, pesticides,
fungicides and distilled water; articles for cleaning such as brooms, scrubbing brushes, dustpans and dust
brushes, dusters, tea towels, floor cloths, household sponges, scourers, steel wool and chamois leathers;
paper products such as filters, tablecloths and table napkins, kitchen paper, vacuum cleaner bags and
cardboard tableware, including aluminium foil and plastic bin liners; other non-durable household articles
such as matches, candles, lamp wicks, methylated spirits, clothes-pegs, clothes hangers, pins, safety pins,
sewing needles, knitting needles, thimbles, nails, screws, nuts and bolts, tacks, washers, glues and
adhesive tapes for household use, string, twine and rubber gloves; polishes, creams and other shoecleaning articles; and fire extinguishers for households. Excludes brushes and scrapers for paint, varnish
and wallpaper (see DIY and Decorators' Supplies); horticultural products for the upkeep of ornamental
gardens (see Recreational Goods and Other Miscellaneous Goods); paper handkerchiefs, toilet paper, toilet
soaps, toilet sponges and other products for personal hygiene (see Chemists' Goods); and cigarette, cigar
and pipe lighters and lighter fuel (see Recreational Goods and Other Miscellaneous Goods).
Bicycles
All consumer retail expenditure on bicycles and tricycles of all types, including rickshaws. Excludes toy
bicycles and tricycles (see Recreational Goods and Other Miscellaneous Goods) and cycle helmets and
clothing (see Clothing).
Recreational Goods
All consumer retail expenditure on musical instruments of all sizes, including electronic musical instruments,
such as pianos, organs, violins, guitars, drums, trumpets, clarinets, flutes, recorders, harmonicas, etc.;
billiard tables, ping-pong tables, pinball machines, gaming machines, etc.; gymnastic, physical education
and sport equipment such as balls, shuttlecocks, nets, rackets, bats, skis, golf clubs, foils, sabres, poles,
weights, discuses, javelins, dumb-bells, chest expanders and other body-building equipment; parachutes
and other sky-diving equipment; firearms and ammunition for hunting, sport and personal protection; fishing
rods and other equipment for fishing; equipment for beach and open-air games, such as bowls, croquet,
frisbee, volleyball, and inflatable boats, rafts and swimming pools; camping equipment such as tents and
accessories, sleeping bags, backpacks, air mattresses and inflating pumps, camping stoves and barbecues;
repair of sports goods and camping equipment; toys of all kinds including dolls, soft toys, toy cars and trains,
toy bicycles and tricycles, toy construction sets, puzzles, plasticine, electronic games, masks, disguises,
jokes, novelties, fireworks and rockets, festoons and Christmas tree decorations; card games, parlour
games, chess sets and the like; stamp-collecting requisites (used or cancelled postage stamps, stamp
albums, etc., but excluding unused postage stamps), other items for collections (coins, medals, minerals,
zoological and botanical specimens, etc., but excluding collectors' items falling into the category of works of
art or antiques, which are included under Furniture and Floor Coverings), and other tools and articles not
elsewhere classified for hobbies; video-game software, video-game cassettes and video-game CD-ROMs;
video-game computers that plug into a television set; pets (excluding horses and ponies), pet foods,
veterinary and grooming products for pets (excluding veterinary services), collars, leashes, kennels,
birdcages, fish tanks and cat litter, etc.
Other Miscellaneous Goods
Writing pads, envelopes, account books, notebooks, diaries, etc.; pens, pencils, fountain pens, ballpoint
pens, felt-tip pens, inks, erasers, pencil sharpeners, etc.; stencils, carbon paper, typewriter ribbons, inking
pads, correcting fluids, etc.; paper punches, paper cutters, paper scissors, office glues and adhesives,
staplers and staples, paper clips, drawing pins, etc.; drawing and painting materials such as canvas, paper,
card, paints, crayons, pastels and brushes; toner and ink cartridges; educational materials such as exercise
books, slide rules, geometry instruments, slates, chalks and pencil boxes (but excluding children's
scrapbooks, which are included under Books); posters, plain or picture postcards (but excluding pre-franked
postcards and aerogrammes), calendars; catalogues and advertising material; greeting cards and visiting
cards, announcement and message cards; maps and globes; travel goods and other carriers of personal
effects: suitcases, trunks, travel bags, attaché cases, satchels, hand-bags, wallets, purses, etc.; articles for
babies such as baby carriages, pushchairs, carrycots, recliners, car beds and seats, back-carriers, front
carriers, reins and harnesses, etc. (but excluding baby clothing, which is included under Clothing, baby
19
furniture, which is included under Furniture and Floor Coverings, feeding bottles, which are included under
China, Glass and Utensils, and nappies, which are included under Chemists' Goods); articles for smokers
such as pipes, lighters, cigarette cases, cigar cutters, ashtrays, etc.; miscellaneous personal articles such as
non-prescription sunglasses, walking sticks and canes, umbrellas and parasols, fans, keyrings, etc.;
funerary articles such as coffins, gravestones, urns, etc.; lighter fuel; wall thermometers and barometers;
and the repair of personal effects.
Bulky Goods
The bulky goods category is made up of Furniture and floor coverings (not the larger "furniture, floor coverings
and household textiles" group) and Domestic appliances.
Total DIY Related Goods
This provides a total figure for all DIY related spend, including repair and maintenance materials; tools and
equipment for house and garden; gardens, plants and flowers; 4.2% of cleaning materials; 15% of furniture
and floor coverings.
Leisure Goods and Services Expenditure
Consumer expenditure for the following leisure categories is also available from the Pitney Bowes
Leisure Goods and Service Expenditure Database:
Pitney Bowes Leisure Category
Audio-visual, photo and optical
9.1.1 Audio visual equipment
9.1.2 Photographic and optical equipment
9.1.3 Information processing equipment
9.1.4 Recording media
Gardens, flowers and plants
9.3.3 Gardens, plants and flowers
Recreational goods
Sum of 9.2.1, 9.2.2, 9.3.1, 9.3.2 and 9.3.4 (see
below)
9.2.1 Major durables for outdoors recreation
Major and minor durables for indoor and
outdoor recreation
Games, toys and hobbies
9.2.2 Musical instruments and major durables for
indoor recreation
9.3.1 Games, toys and hobbies
Sports, camping and open-air recreational
equipment
9.3.2 Sports, camping and open air recreation
equipment
Pets and related products
9.3.4 Pets and related products
Books
9.5.1 Books
Recreational and cultural services
9.4.1 Recreational and sporting services
9.4.2 Cultural services
9.4.3 Games of chance
Restaurants, cafes and canteens
11.1.1 Restaurants and cafes
11.1.2 Canteens
20
Accommodation services
11.2 Accommodation Services
Hairdressing and personal grooming
12.1.1 Hairdressing and personal grooming
Detailed Category Definitions
Recreational and Cultural Services
Services provided by sports stadia, racecourses, rinks, golf courses, pools, courts, bowling alleys, gyms,
fairs, parks, dancing and skating; cinemas, theatres, concerts, circuses, TV licences, TV rental, satellite
subscription, video hire, hire of musicians, clowns, performers, photographers, film processing; lotteries,
scratch cards, betting, gaming, gambling.
Restaurants, Cafes and Canteens
Catering services, meals, alcohol, snacks and drinks sold by restaurants, pubs, cafes, etc.; catering services
of works canteens, office restaurants, school and educational establishment canteens.
Accommodation Services
Accommodation in hotels, motels, inns, "bed and breakfast" establishments, caravan sites, youth hostels,
boarding schools, universities and other educational establishment accommodation.
Hairdressing and Personal Grooming
Hairdressing salons, barbers, beauty shops, manicures, pedicures, Turkish baths, saunas, solariums, nonmedical massages, etc. Excludes spas and fitness centres.
Total Leisure Services
Total expenditure for recreational and cultural services; restaurants, cafes and canteens; accommodation
services; hairdressing and personal grooming.
Total Leisure Goods
Total expenditure for audio-visual, photo and optical; gardens, flowers and plants; major and minor durables
for indoor and outdoor recreation; games, toys and hobbies; sports, camping and open-air recreations; pets
and related products; books [see the previous section for detailed definitions].
Other Expenditure Categories
Consumer expenditure is also available for the following categories:
Pitney Bowes Other Expenditure
Category
Actual rents
04.1 Actual rentals for housing
Owner-occupier rents
04.2 Imputed rentals for housing
Electricity, gas and other fuels
04.5 Electricity, gas and other fuels
Housing R&M services
04.3.2 Services for the maintenance and repair
of the dwelling
Domestic and household services
05.6.2 Domestic services and household
services
Vehicle fuels and lubricants
07.2.2 Fuels and lubricants for personal
transport equipment
Transport services
07.3 Transport services
Telephone and telefax services
08.3 Telephone and telefax services
Education
10. Education
Insurance
12.5 Insurance
Financial services
12.6 Financial services n.e.c.
21
Actual Rents
Rentals actually paid by tenants or subtenants occupying unfurnished or furnished premises as their main
residence; payments by households occupying a room in a hotel or boarding house as their main residence;
rentals actually paid for secondary residences. Excludes accommodation services of educational
establishments, hostels, holiday villages and holiday centres, and of retirement homes for elderly persons.
Owner-Occupier Rents
Imputed rentals of owners occupying their main and secondary residences; imputed rentals of households
paying a reduced rental or housed free. In the national accounts, owner-occupiers are deemed
unincorporated businesses producing housing services, which they then consume. This consumption is
therefore a component of household final consumption expenditure. The principle involved is to impute a
rental value for an owner-occupied property, which is the same as the rental that would be paid for a similar
property in the private rented sector.
The main reason for this imputation treatment is to minimise distortions to the consumption figures which
would otherwise arise when there were changes in housing tenure, for example from rented to owneroccupied. Such distortions can exist between different countries, but also over time within a single country.
This treatment requires the imputing of a rental payment to the owner-occupied sector, analogous to the
activity of payment of market or public sector rentals. For imputed rentals separate estimates, using similar
methodology to paid rental, are made both for owner-occupiers and those living rent-free.
Utilities
Electricity; town gas and natural gas, liquefied hydrocarbons (butane, propane, etc.); domestic heating and
lighting oils; coal, coke, briquettes, firewood, charcoal, peat and the like; hot water and steam purchased
from district heating plants; associated expenditure such as hire of meters, reading of meters, standing
charges, etc.
Housing R&M Services
Services of plumbers, electricians, carpenters, glaziers, painters, decorators, floor polishers, etc. engaged
for minor maintenance and repair of the dwelling (both the cost of labour and the cost of materials are
covered). Excludes separate purchases of materials made by households with the intention of undertaking
the maintenance or repair themselves; services engaged for major maintenance and repair (intermediate
consumption) or for extension and conversion of the dwelling (capital formation).
Domestic and Household Services
Domestic services supplied by paid staff employed in private service such as butlers, cooks, maids, drivers,
gardeners, governesses, secretaries, tutors and au pairs; similar services, including babysitting and
housework, supplied by enterprises or self-employed persons; household services such as window cleaning,
disinfecting, fumigation and pest extermination; dry-cleaning, laundering and dyeing of household linen,
household textiles and carpets; hire of furniture, furnishings, carpets, household equipment and household
linen.
Vehicle Fuels and Lubricants
Petrol and other fuels such as diesel, liquid petroleum gas, alcohol and two-stroke mixtures; lubricants,
brake and transmission fluids, coolants and additives. Excludes charges for oil changes and greasing.
Transport Services
Transport of individuals and groups of persons and luggage by train, tram, underground, bus, coach, taxi,
hired car with driver, aeroplane, helicopter, ship, boat, ferry, hovercraft and hydrofoil; transport of private
vehicles; funicular, cable-car and chairlift transport; removal and storage services; services of porters and
left-luggage and luggage-forwarding offices; travel agents' commissions (if separately priced).
Telephone Services
Installation and subscription costs of personal telephone equipment; telephone calls from a private line or
from a public line (public telephone box, post office cabin, etc.); telephone calls from hotels, cafés,
restaurants and the like; telegraphy, telex and telefax services; information transmission services; Internet
connection services; hire of telephones, telefax machines, telephone-answering machines and telephone
22
loudspeakers; radio-telephony, radio-telegraphy and radio telex services.
Education
Pre-primary, primary, secondary, post-secondary, tertiary education; educational programmes which do not
require any special prior instruction, in particular vocational training and cultural development. Excludes
driving lessons; recreational training courses such as sport or bridge lessons given by independent
teachers.
Insurance
Service charges for life assurance, death benefit assurance, education assurance, etc.; for insurance taken
out against fire, theft, water damage, etc.; for private sickness and accident insurance; for insurance in
respect of personal transport equipment; for travel insurance and luggage insurance; for other insurance
such as civil liability for injury or damage to third parties or their property.
Financial Services
Financial intermediation services indirectly measured; actual charges for the financial services of banks,
post offices, saving banks, money changers and similar financial institutions; fees and service charges of
brokers, investment counsellors, tax consultants and the like; administrative charges of private pension
funds and the like.
Time Series Estimates
Chapter 3 of this "Retail Guide" quotes estimates of past and projected future growth rates of retail
spending. The data used in the estimation of these trends have been calculated using a method
known as chain-linking. This means that rather than adding up a number of consumer spending
categories measured in a recent year’s prices in order to arrive at retail expenditure, allowance is
made for the fact that relative prices can change substantially over time and that the relative prices
of, say 2011, might not be particularly meaningful when aggregating data from the 1960s. A further
advantage of chain-linked data is that they are less prone to revision when price bases are
changed.
Chain-linking combines constant price growth rates measures in different years' prices. It is now the
system used for all National Accounts estimates and it is the appropriate method for calculating
retail expenditure growth rates. The time series data supplied here uses the current ONS
convention of chain linking the data to 2011 and then reverting to simple additive estimates after
2011.
Using chain-linked estimates actually increases historical growth rates for comparison goods. Note,
however, that although this affects estimated historical trends, the Oxford Economics forecasts (as
opposed to the trend-based projections) take into account the impact of the recession and
tightened government policy which will both contribute to a period of restrained spending growth.
Chain-linked estimates have been produced at the comparison and convenience goods levels. The
series for "All Retail Goods" quoted is the sum of the chain-linked series for comparison and
convenience goods. Note that chain-linking only affects constant price estimates used in trend
analysis and it does not affect current price expenditure estimates.
23
3
Chapter 3: Using the Retail
Spending Estimates
In this chapter:
 Recent Trends
25
 Longer-run Trends
25
 Oxford Economics' Forecasts
27
 Trend Projections
28
 Prices
34
 Special Forms of Trading
35
Recent Trends
In 2014 real per capita spending on convenience goods in the UK fell by 1.7% (see Table 3.1).
This makes it the ninth consecutive year of contractions, the sharpest fall being in 2009. As a
result, in 2014 per capita spending on convenience goods was 14% below its peak of 2005 (in
volume terms).
In contrast to convenience goods, spending on comparison goods has held up relatively well
during the last five years. Having fallen by 1.6% in 2009 as the UK economy contracted, it has
recovered strongly since then and by 2014 was already 14% above the 2008 level. The most
recent data suggests that in 2014 per capita spending on comparison goods rose by a
particularly impressive 5.7%.
From looking at these two recent trends it becomes evident that during the recession and the
following period of stagnant income growth, on average households chose to cut back on
convenience goods (i.e. the essentials such as food) and at the same time continued to increase
their spending on comparison goods (i.e. luxuries such as electronics). This is partly explained
by the fact the prices of convenience goods have been continuously rising while those of
comparison goods remained flat, so by consuming fewer convenience goods some households
had more money available to spend on comparison goods. In microeconomics this is known as
the substitution effect.
Longer-run Trends
From as early as 1964, comparison goods have accounted for an increasing share of household
spending. As household incomes rose, spending on comparison goods grew much faster than
spending on convenience goods. The compound annual growth rate (CAGR) for per capita
comparison goods spending over the period 1994-14 was 5.7% per year, compared to virtually
no growth for convenience goods (see Table 3.2). Having experienced some very rapid growth
in the late 1990s and early 2000s, the 2009-11 slowdown has dragged the average growth rates
of comparison goods down somewhat. Over the whole period of 1964-2014 the average rate of
increase of spending per capita on comparison goods was 4.6% per year. As a result of this
strong past growth, in 2014 comparison goods represented almost 63% of all retail goods
expenditure (in nominal terms).
Historically per capita growth in expenditure on convenience goods has been much slower. In
fact, over the past fifteen years spending per capita has on average fallen by -0.4% per year, with
moderate positive growth in the early and mid-2000s countered by contractions in the years that
followed. As a result, over the period of 1964-2014 the average growth of spending per capita on
convenience goods was just 0.2% per year.
25
Table 3.1: UK per capita retail expenditure on convenience and comparison goods (2011
prices)
Constant (2011) Prices, per Capita Consumption (£)
Convenience Comparison
goods
goods
1984
1985
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
2024
2025
2026
1,717
1,730
1,770
1,808
1,838
1,866
1,863
1,840
1,838
1,860
1,878
1,863
1,924
1,945
1,947
2,005
2,042
2,034
2,065
2,094
2,155
2,177
2,173
2,143
2,066
1,980
1,970
1,918
1,915
1,908
1,876
1,868
1,871
1,872
1,876
1,885
1,900
1,917
1,936
1,955
1,974
1,992
2,009
620
655
709
773
843
883
910
919
964
1,025
1,121
1,179
1,254
1,359
1,482
1,632
1,809
1,951
2,154
2,353
2,475
2,592
2,751
2,878
2,997
2,949
3,011
3,029
3,101
3,226
3,410
3,585
3,771
3,923
4,052
4,179
4,318
4,466
4,617
4,776
4,943
5,112
5,286
All
goods
2,337
2,385
2,480
2,581
2,681
2,748
2,772
2,759
2,802
2,886
2,999
3,042
3,178
3,304
3,429
3,637
3,851
3,985
4,219
4,448
4,630
4,769
4,923
5,022
5,063
4,929
4,982
4,947
5,016
5,134
5,285
5,453
5,642
5,796
5,928
6,064
6,218
6,383
6,553
6,731
6,917
7,104
7,295
Price Deflators, 2011=100
Growth rates (%)
All
goods
goods
goods
-1.1
0.7
2.3
2.1
1.7
1.5
-0.2
-1.2
-0.1
1.2
1.0
-0.8
3.3
1.1
0.1
3.0
1.8
-0.4
1.5
1.4
2.9
1.0
-0.2
-1.3
-3.6
-4.2
-0.5
-2.6
-0.2
-0.3
-1.7
-0.4
0.2
0.1
0.2
0.5
0.8
0.9
1.0
1.0
1.0
0.9
0.8
4.9
5.7
8.3
9.0
9.0
4.7
3.1
1.0
4.9
6.4
9.3
5.2
6.4
8.4
9.0
10.1
10.8
7.9
10.4
9.2
5.2
4.7
6.1
4.6
4.1
-1.6
2.1
0.6
2.4
4.0
5.7
5.1
5.2
4.0
3.3
3.1
3.3
3.4
3.4
3.4
3.5
3.4
3.4
0.5
2.1
4.0
4.1
3.9
2.5
0.9
-0.5
1.5
3.0
3.9
1.4
4.5
4.0
3.8
6.1
5.9
3.5
5.9
5.4
4.1
3.0
3.2
2.0
0.8
-2.6
1.1
-0.7
1.4
2.3
3.0
3.2
3.5
2.7
2.3
2.3
2.5
2.7
2.7
2.7
2.8
2.7
2.7
goods
goods
42.0
43.9
45.4
46.9
48.8
51.3
55.3
59.2
60.9
62.2
62.7
65.1
67.2
67.5
69.0
69.7
70.0
72.2
72.7
73.9
74.3
75.3
77.3
80.3
86.2
90.8
93.9
100.0
103.9
108.0
108.7
107.7
109.6
112.1
114.2
116.3
118.4
120.5
122.5
124.5
126.6
128.8
131.3
112.9
117.9
121.3
123.6
127.3
130.7
134.9
140.3
141.3
140.5
137.8
139.4
140.7
141.2
138.6
133.9
127.7
124.3
119.9
116.2
112.8
109.0
106.3
104.1
101.0
98.7
99.2
100.0
100.1
100.2
99.7
99.1
98.3
97.9
98.0
98.3
98.9
99.7
100.4
101.2
102.0
102.8
103.6
4.1%
1.7%
3.9%
1.4%
1.7%
2.0%
-2.0%
-1.2%
-0.1%
0.8%
All
goods
60.8
64.2
67.1
69.9
73.4
76.8
81.4
86.2
88.6
90.0
90.7
93.9
96.2
97.8
99.0
98.5
97.1
97.7
96.8
96.3
94.9
93.6
93.5
93.9
95.0
95.6
97.1
100.0
101.6
103.1
102.9
102.1
102.0
102.5
103.1
103.9
104.9
105.9
106.9
107.9
109.0
110.1
111.2
Average annual growth rates
1984-94
1994-04
2004-14
2014-20
2020-26
0.9%
1.4%
-1.4%
0.2%
0.9%
6.1%
8.2%
3.3%
4.0%
3.4%
2.5%
4.4%
1.3%
2.7%
2.7%
4.1%
0.4%
0.8%
0.3%
1.0%
NOTE: forecast of expenditure e.g. 2014-20 includes annual growth from the 2014 level to the 2020 level
26
Oxford Economics' Forecasts
Oxford Economics’ forecasts from the UK consumer spending model are shown in Tables 3.1
and 3.2, and in Figure 3.1. Unlike the alternative pure trend-based projections described in the
next section, these forecasts are consistent with past trends, but are also based upon expected
changes in economic variables that are considered to be drivers of consumer spending.
The UK economy performed well in 2014, with its GDP growing by 3%. The first half of 2015 has
also been strong, and we expect this strength to persist in the medium term. We forecast the UK
economy to grow by 2.6% in 2015 and 2.8% in 2016, before slowing down slightly and settling at
around 2.5% in the years to 2026.
We also expect household spending power to strengthen in the short term. The CPI inflation is
anticipated to remain close to zero until the latter part of 2015, with the odd negative reading
likely. And while it should then rise back above 1%, once the base effects associated with the
collapse in the oil price have begun to kick in, underlying pressures remain subdued. We
therefore expect to see inflation remain well below the 2% target throughout 2016. When
combined with stronger wage growth, as a result of a tightening labour market, it should deliver a
substantial boost to household spending power. As a result, we forecast total consumer
spending to grow by 3.3% in 2015 and 2.8% in 2016. However, the momentum behind
consumption is likely to weaken from 2017 as the deep cuts to in-work benefits are introduced.
These will more than offset the boost from the new ‘living wage’, supressing growth in household
incomes. Total consumer spending growth is forecast to slow to around 2% per year from 2018,
before picking up again from 2021.
Table 3.2: Forecasts of UK per capita retail expenditure by goods type (2011 prices)
Expenditure per capita (£): Oxford Economics' forecasts
Convenience Goods Detail
Alcohol
Tobacco
Food
(off-licence)
Comparison Goods Detail
Clothing
H'hold Audio-vis
& Footwear Goods
Goods
Convenience
goods
Comparison
goods
All
goods
2013
1,908
3,226
5,134
238
155
1396
911
575
369
2014
1,876
3,410
5,285
240
149
1375
958
599
403
2015
1,868
3,585
5,453
244
144
1371
991
636
432
2020
1,900
4,318
6,218
243
130
1424
1222
729
566
2026
2,009
5,286
7,295
244
123
1537
1537
848
739
2.7%
2.7%
0.2%
0.1%
-2.3%
-1.6%
0.6%
0.9%
4.1%
4.0%
3.3%
2.9%
5.8%
5.2%
2.3%
2.6%
2.8%
2.5%
2.5%
2.1%
-0.8%
10.0%
11.2%
11.7%
11.3%
11.5%
11.8%
10.0%
Average annual forecast growth rates
2014-20
2014-26
0.2%
0.6%
4.0%
3.7%
Average annual historical growth rates
(calculated by fitting a log-linear regression line by the method of least squares to give a compound growth rate)
1964-14
1979-14
1984-14
1989-14
1994-14
1999-14
2004-14
0.2%
0.2%
0.3%
0.0%
0.0%
-0.4%
-1.4%
4.6%
5.3%
5.8%
5.6%
5.7%
5.0%
3.3%
1.9%
2.4%
2.8%
2.7%
2.9%
2.5%
1.3%
2.0%
1.7%
1.9%
1.8%
2.3%
1.6%
-0.5%
-2.6%
-3.2%
-3.2%
-3.3%
-3.7%
-3.9%
-4.2%
0.5%
0.7%
0.6%
0.5%
0.4%
0.3%
-0.4%
4.8%
6.0%
6.4%
6.4%
7.7%
8.4%
6.6%
27
Largely reflecting the outlook for household incomes and total spending, we forecast growth in
per capita expenditure on comparison goods to remain at above 5% in 2015 and 2016. Over the
whole forecast period of 2014-26 we expect per capita expenditure on comparison goods to
grow by an average of 3.7% per year, which is faster than the rate seen during the last ten
years, but significantly slower than the growth experienced during the boom period of early
2000s.
Figure 3.1: Retail expenditure per capita
annual % change, constant prices
12
10
Comparison
goods
8
6
4
2
0
-2
-4
Convenience
goods
-6
1982 1986 1990 1994 1998 2002 2006 2010 2014 2018 2022 2026
Source : Oxford Economics/ONS
In contrast to strong growth expected for comparison goods, we forecast per capita spending on
convenience goods to fall by 0.4% in 2015, which would make it the tenth consecutive year of
contraction. Slow recovery is anticipated to start in 2016 with growth of 0.2%, and we expect it to
pick up from 2020 onwards. Over the period of 2014-26 we forecast per capita spending on
convenience goods to grow by an average of 0.6% per year, as rising incomes and low
unemployment boost household confidence.
It is worth noting that the 3.7% average growth forecast for comparison goods over 2014-26 is
between the short term and medium term trend projections discussed in the next section, while
the 0.6% rate forecast for convenience goods is very close to the 0.5% long term and ultra-long
term growth projection. In other words, although the Oxford Economics forecast and the trendbased projections have been prepared in very different ways, some of their results are very
similar.
Trend Projections
Projections of UK annual average retail expenditure per capita by goods type, including Special
Forms of Trading and in constant 2011 prices (chain-linked volumes), are presented in Table 3.3,
and illustrated in Figures 3.2 to 3.10. These projections are based on time series analysis of past
trends in expenditure per capita data from 1964 (the earliest year for which data are available),
and are derived by fitting log-linear regression lines to the data using the method of least
28
squares. The estimated growth rates are shown in the second row of Table 3.3. The projections
are derived solely from past trends and take no account of current economics or future
expectations.
Convenience goods’ retail expenditure has been erratic over the last 40 years, with low trend
growth over the period as a whole. Therefore the statistical relationship is less reliable and there
appear to have been some trend breaks. Out of the four trends illustrated, the two most
statistically robust estimates of trend growth calculated are the ultra-long term (1964-2014) and
short term (2004-14). However, as the short term trend largely reflects the impact of the recent
recession, we expect future spending on convenience goods to start recovering and to be closer
to the ultra-long term trend.
Trend growth rates of comparison goods expenditure per capita are statistically robust for all
periods, with the strongest relationship observed over the long term (1984-2014), when the fitted
annual growth rate for spending on comparison goods per capita was 6.3%. Having said that,
the fit over the ultra-long term is almost just as good.
Table 3.3: Growth and projections of UK annual average consumer retail expenditure per
capita by goods type (2011 prices)
Ultra long term trends
1964-2014
Long term trends
1984-2014
Medium term trends
1994-2014
Short term trends
2004-2014
Conv.
goods
Comp.
goods
All
goods
Conv.
goods
Comp.
goods
All
goods
Conv.
goods
Comp.
goods
All
goods
Conv.
goods
Comp.
goods
All
goods
R square
0.748
0.968
0.925
0.425
0.978
0.964
0.004
0.934
0.900
0.924
0.920
0.692
Average annual growth
0.5%
5.1%
2.2%
0.5%
6.3%
3.1%
0.1%
5.9%
3.0%
-1.7%
2.7%
0.9%
(+/-0.6)
(+/-0.44)
95% confidence limits
(+/-0.08) (+/-0.26) (+/-0.18) (+/-0.21) (+/-0.35) (+/-0.22) (+/-0.39) (+/-0.73) (+/-0.47) (+/-0.37)
Actual and projected expenditure per capita (2011 prices) and 95% confidence limits for the regression points and lines
£
£
£
£
£
£
£
£
£
£
£
£
1,908
2,063
3,226
3,264
5,134
5,006
1,908
2,069
3,226
3,749
5,134
5,558
1,908
2,011
3,226
3,657
5,134
5,547
1,908
1,889
3,226
3,268
5,134
5,148
-Points
(+/-173)
(+/-936)
(+/-1100)
(+/-223)
(+/-693)
(+/-644)
(+/-234)
(+/-806)
(+/-782)
(+/-79)
(+/-222)
(+/-260)
-Line
(+/-44)
(+/-237)
(+/-248)
(+/-70)
(+/-215)
(+/-200)
(+/-83)
(+/-305)
(+/-278)
(+/-33)
(+/-93)
(+/-109)
1,876
2,073
3,410
3,432
5,285
5,115
1,876
2,079
3,410
3,985
5,285
5,728
1,876
2,012
3,410
3,872
5,285
5,713
1,876
1,858
3,410
3,356
5,285
5,193
-Points
(+/-175)
(+/-987)
(+/-996)
(+/-226)
(+/-740)
(+/-667)
(+/-236)
(+/-863)
(+/-813)
(+/-80)
(+/-235)
(+/-270)
-Line
(+/-46)
(+/-257)
(+/-261)
(+/-73)
(+/-240)
(+/-217)
(+/-90)
(+/-346)
(+/-309)
(+/-38)
(+/-111)
(+/-128)
2013 expenditure
2013 projected expenditure
95% limits:
2014 expenditure
95% limits:
95% limits:
2,083
3,608
5,227
2,050
3,749
5,558
2,011
3,657
5,547
1,889
3,268
5,148
-Points
(+/-176)
(+/-1040)
(+/-1020)
(+/-228)
(+/-791)
(+/-691)
(+/-239)
(+/-925)
(+/-847)
(+/-81)
(+/-249)
(+/-282)
-Line
(+/-48)
(+/-278)
(+/-275)
(+/-77)
(+/-268)
(+/-235)
(+/-96)
(+/-393)
(+/-341)
(+/-43)
(+/-131)
(+/-148)
95% limits:
2,131
4,637
5,825
2,137
5,750
6,864
2,019
5,457
6,823
1,678
3,941
5,475
-Points
(+/-182)
(+/-1352)
(+/-1150)
(+/-241)
(+/-1108)
(+/-829)
(+/-256)
(+/-1320)
(+/-1049)
(+/-92)
(+/-350)
(+/-361)
-Line
(+/-56)
(+/-411)
(+/-352)
(+/-99)
(+/-453)
(+/-340)
(+/-132)
(+/-702)
(+/-539)
(+/-66)
(+/-252)
(+/-261)
95% limits:
2,191
6,266
6,633
2,198
8,297
8,226
2,025
7,689
8,148
1,515
4,627
5,771
-Points
(+/-190)
(+/-1857)
(+/-1331)
(+/-259)
(+/-1673)
(+/-1039)
(+/-283)
(+/-2051)
(+/-1378)
(+/-107)
(+/-531)
(+/-492)
-Line
(+/-67)
(+/-644)
(+/-465)
(+/-127)
(+/-815)
(+/-508)
(+/-176)
(+/-1307)
(+/-860)
(+/-90)
(+/-448)
(+/-415)
29
Figure 3.2: Convenience Goods - ultra long term trends (1964 - 2014)
£ / head, constant 2011 prices
Actual expenditure
95% confidence limit of the points
26
24
22
18
2020
16
14
12
08
2010
06
04
02
98
Expenditure trend
2000
96
94
1,000
92
1,000
88
1,200
1990
1,200
86
1,400
84
1,400
82
1,600
1980
1,600
78
1,800
76
1,800
74
2,000
72
2,000
1970
2,200
68
2,200
66
2,400
64
2,400
OE Forecast
Figure 3.3: Convenience Goods - long term trends (1984 - 2014)
Actual expenditure
30
Expenditure trend
26
24
22
2020
18
16
14
12
2010
08
06
04
02
2000
98
96
94
1,000
92
1,000
88
1,200
1990
1,200
86
1,400
84
1,400
82
1,600
1980
1,600
78
1,800
76
1,800
74
2,000
72
2,000
1970
2,200
68
2,200
66
2,400
64
2,400
OE Forecast
Figure 3.4: Convenience Goods - short term trends (2004 - 2014)
26
24
22
18
2020
16
14
12
08
2010
06
04
02
98
Expenditure trend
2000
74
Actual expenditure
96
1,000
94
1,000
92
1,200
1990
1,200
88
1,400
86
1,400
84
1,600
82
1,600
1980
1,800
78
1,800
76
2,000
72
2,000
68
2,200
1970
2,200
66
2,400
64
2,400
OE Forecast
Figure 3.5: Comparison Goods - ultra long term trends (1964 - 2014)
10,000
10,000
9,000
9,000
8,000
8,000
7,000
7,000
6,000
6,000
5,000
5,000
4,000
4,000
3,000
3,000
2,000
2,000
1,000
1,000
Actual expenditure
Expenditure trend
26
24
22
2020
18
16
14
12
2010
08
06
04
02
2000
98
96
94
92
1990
88
86
84
82
1980
78
76
74
72
1970
68
66
0
64
0
OE Forecast
31
Figure 3.6: Comparison Goods - long term trends (1984 - 2014)
10,000
10,000
9,000
9,000
8,000
8,000
7,000
7,000
6,000
6,000
5,000
5,000
4,000
4,000
3,000
3,000
2,000
2,000
1,000
1,000
Actual expenditure
26
24
22
18
2020
16
14
12
08
2010
06
04
02
98
Expenditure trend
2000
96
94
92
88
1990
86
84
82
78
1980
76
74
72
68
1970
66
0
64
0
OE Forecast
Figure 3.7: Comparison Goods - short term trends (2004 - 2014)
8,000
8,000
7,000
7,000
6,000
6,000
5,000
5,000
4,000
4,000
3,000
3,000
2,000
2,000
1,000
1,000
Actual expenditure
32
Expenditure trend
26
24
22
2020
18
16
14
12
2010
08
06
04
02
2000
98
96
94
92
88
1990
86
84
82
1980
78
76
74
72
1970
68
66
0
64
0
OE Forecast
Figure 3.8: All Goods - ultra long term trends (1964 - 2014)
Actual expenditure
26
24
22
18
2020
16
14
12
08
2010
06
04
02
98
Expenditure trend
2000
1,000
96
1,000
94
2,000
92
2,000
88
3,000
1990
3,000
86
4,000
84
4,000
82
5,000
78
5,000
1980
6,000
76
6,000
74
7,000
72
7,000
1970
8,000
68
8,000
66
9,000
64
9,000
OE Forecast
Figure 3.9: All Goods - long term trends (1984 - 2014)
Actual expenditure
Expenditure trend
26
24
22
18
2020
16
14
12
2010
08
06
04
02
2000
98
1,000
96
1,000
94
2,000
92
2,000
1990
3,000
88
3,000
86
4,000
84
4,000
82
5,000
1980
5,000
78
6,000
76
6,000
74
7,000
72
7,000
1970
8,000
68
8,000
66
9,000
64
9,000
OE Forecast
33
Figure 3.10: All Goods - short term trends (2004 - 2014)
Actual expenditure
Expenditure trend
26
24
22
18
2020
16
14
12
08
2010
06
04
02
98
2000
1,000
96
1,000
94
2,000
92
2,000
88
3,000
1990
3,000
86
4,000
84
4,000
82
5,000
78
5,000
1980
6,000
76
6,000
74
7,000
72
7,000
68
8,000
1970
8,000
66
9,000
64
9,000
OE Forecast
Prices
Price indices for convenience goods, comparison goods and all goods are calculated directly
from the series of consumer expenditure by type at current and constant prices, and are shown
in Table 3.3. The price indices are therefore fully compatible with the estimates of consumer
retail expenditure per capita given in this report. Use of these calculated indices with the
expenditure estimates is preferable to the use of either the retail price index (RPI) or the
consumer price index (CPI) as both of them incorporate a significant number of items not
purchased through retail outlets.
Prices of comparison good started falling in late 1990s, and by 2009 they were around 30%
lower than their peak in 1997. Dominated by declining prices of electrical goods, this deflation is
in line with technological advances and movement of production to lower cost countries,
especially China and India, feeding through into prices. This trend is also evident for clothing
and textiles.
However, since 2010 the prices of comparison goods have stabilised and even rose in some
years. This can be partly attributed to wages rising in China and India and pushing up costs of
production, as well as the depreciation of sterling. We expect that in the long run prices of
comparison goods will continue rising, albeit at a slow pace. Over the period of 2014-26 we
forecast comparison goods prices to rise by an average of 0.3% per year.
Convenience goods price inflation has historically been much higher than that of comparison
goods and prices have continued to rise. Since 2007 there has been a tendency for acceleration
in the rate of convenience goods inflation, however in 2014 prices only rose by 0.7%. Going
forward we anticipate convenience goods price inflation to come down from the highs seen over
the last ten years and average 1.6% per year over the period of 2014-26.
34
Special Forms of Trading
Data Issues
Special forms of trading (also known as Non-Store Retail Sales) are sales that do not take place
through traditional store-based outlets. This includes spending through outlets, such as the
internet, mail order, party plan and vending machines, and other non-store activity such as
market and roadside stalls. They are of interest in a retail-planning context because they can be
viewed as taking spending away from conventional stores.
The rapid growth of the internet in recent years has increased interest in the market share of
non-store retail sales and the potential impact on high streets and shopping centres. Alongside
this, however, there has been considerable confusion over the interpretation of the available
data and uncertainty over the exact impact of the rise of the internet on conventional stores.
Some of the main issues are summarised in the table below:
Issues with the Measurement and Interpretation of Special Forms of Trading
Measurement
Conceptual


The ONS produce two main series
of interest:
1. Non-Store Retail Sales – which
covers market stalls, door-to-door
selling, mail order and internet sales
of wholly non-store operations
2. Internet Sales – which covers all
internet sales including those
already included in Non-Store Sales
(e.g. Amazon) and internet sales by
predominantly store-based
operations (e.g. John Lewis, Tesco)

Need to estimate a single “Broad”
Non-Store Sales estimate




Traditionally Non-Store Sales (or
Special Forms of Trading) reduced
the potential turnover available to
retail outlets but…
The advent of multi-channel
retailing has clouded the issue
Stores can be seen as showrooms
or a source of stock for internet
sales/internet can even direct
customers to stores (e.g. use
internet to research but buy in store)
Smartphone technology blurs the
boundaries further
Catalogue-internet distinction has
become increasingly meaningless
With regards to measurement, the main issue is that the ONS have, for some time, published a
series called Non-Store Retail Sales but it is an incomplete measure of all non-store sales as the
internet component only includes sales by “wholly internet-based” companies and not sales by
companies that also operate conventional stores. Hence, the ONS series includes sales by
companies such as Amazon, who operate solely over the internet, but not the internet sales of
companies who also run conventional stores such as Tesco, John Lewis and practically every
other major retailer. As a result, the ONS Non-Store Retail Sales figures severely under-estimate
the impact of the growth of the internet. This is illustrated in Figure 3.11, which shows the share
of total sales accounted for by the ONS’s Non-Store series growing much slower than the ONS
Internet Sales series (the ONS Non-Store Retails Sales share of the total increased from 4.7% in
2007 to 7.8% in 2014 - but it had been over 8% in the 1980s).
35
Due to the restricted coverage, we term the ONS series the “Narrow Definition” of Non-Store
Retail Sales. The ONS also produce a series for Internet Sales, which is illustrated in Figure
3.11. This series shows a much more rapid increase in market share in recent years and is
much more in line with anecdotal evidence on the growth of the internet and evidence from other
surveys.
Figure 3.11: Measures of Non-Store Retail Sales
% of total retail sales
14
12
Broad Definition of
Non-Store Retail
Sales
10
8
6
ONS Non-Store
(Narrow Definition)
4
2
ONS Internet Sales
0
2002
2004
2006
2008
2010
2012
2014
Source : ONS/Oxford Economics
The statistical issue is that the ONS Internet Sales figures cannot be simply added to the ONS
narrow definition of Non-Store Retail Sales as the two series overlap. The ONS Internet Sales
series includes the sales of both wholly internet based stores and the internet sales of
companies who also operate conventional stores, while the sales of wholly internet based stores
are also included in the ONS narrow definition of Non-Store Retail Sales. However, data on ONS
Internet Sales by store type indicates that around 50% of internet sales are ‘non-store retailing’,
in other words - wholly internet sales. Using this assumption for the overlap, the OE “Broad
Definition” of Non-Store Retail Sales in 2014 would be made up as illustrated in Figure 3.12.
Figure 3.12: Structure of Non-Store Retail Sales
% of total retail sales in 2014 (Broad Definition)
14
12
10
5.7%
8
Internet sales by
mainly store-based
retailers
Wholly internet sales
13.5%
6
5.7%
4
2
Traditional non-store
2.2%
0
Source : Oxford Economics/ONS
36
Figure 3.11 also shows our estimates of the evolution of the Broad Measure of Non-Store Retail
sales since 2002. The Broad Measure’s market share has increased more slowly than the ONS
Internet Sales estimate because it contains the non-internet elements of non-store sales that
have suffered from the growth of the internet. The ONS Internet Sales estimate increased its
share of total sales from 3.4% in 2007 to 11.3% in 2014 while the Oxford Economics Broad
Measure of Non-Store Retail sales increased from 6.4% in 2007 to 13.5% in 2014. Both the
ONS Internet Sales and the Oxford Economic Broad Measure of Non-Store Retail Sales have
increased their share of total sales far more rapidly than the ONS narrow definition.
Breakdowns and Projections
The ONS narrow definition is broken down by type of good while the ONS Internet Sales series
is broken down by type of shop. For example, the ONS Internet Sales breakdown for 2014
shows that 15% of all internet spending has been in predominantly food stores, 37% in
predominately non-food stores, while 48% was attributed to non-store retailing. Based on the
available ONS data and additional data from Datamonitor (UK E-Retail 2011), we estimate that
in 2014 the 13.5% market share of the Broad Measure of Non-Store Retail sales for all goods
breaks down into a 7.3% market share for convenience goods and a 17.2% share for
comparison goods.
Forecasting the future share is difficult. Internet sales penetration is already higher in the UK
than in continental Europe and higher even than in the USA. This means that we have no clear
indicator of a possible future saturation point. Recent increases have also been very rapid and it
is difficult to see why they should suddenly level off when internet usage is still increasing and
the use of smartphone technology in retailing is only just taking off. Nonetheless, the internet’s
market share is likely to level off at some point. Going forward we forecast growth in the nonstore share of comparison goods to gradually start slowing and reach 23.3% by 2026. We
expect the non-store share of convenience goods to start levelling off sooner, reaching 9.9% by
2026. One of the factors potentially limiting convenience internet growth is increasing market
share of discount convenience retailers such as Lidl and Aldi, who currently only sell in-store.
Our forecasts of non-store shares are illustrated in Table 3.4 and Figure 3.13. Table 3.4 also
gives projections of the narrow ONS definition of Non-Store Retail Sales. This is given for
reference only and we would caution against using them as a lower-case alternative.
Figure 3.13: Broad Non-Store Retail Sales
% of total retail sales in each category
25
Comparison Goods
20
All Goods
15
10
Convenience Goods
5
0
2002
2005
2008
2011
2014
2017
2020
2023
2026
Source : Oxford Economics
37
Table 3.4: Non-Store Retail Sales – Projected Market Share
(% of Total Spending)
Broad (OE) Definition
Conven- CompariTotal
ience
son
2002
5.3
2.5
7.0
2003
4.9
2.4
6.3
2004
5.5
2.8
7.1
2005
5.7
3.0
7.3
2006
6.0
3.2
7.5
2007
6.4
3.6
8.0
2008
7.3
4.3
9.1
2009
8.2
4.7
10.3
2010
9.1
4.8
11.7
2011
10.2
5.6
13.1
2012
11.1
5.9
14.4
2013
12.5
6.6
16.3
2014
13.5
7.3
17.2
2015
14.4
7.8
18.1
2016
15.1
8.2
19.0
2017
15.7
8.5
19.7
2018
16.3
8.9
20.3
2019
16.8
9.1
20.9
2020
17.3
9.3
21.4
2021
17.6
9.5
21.9
2022
18.0
9.6
22.2
2023
18.2
9.7
22.5
2024
18.5
9.8
22.8
2025
18.7
9.9
23.0
2026
18.9
9.9
23.2
Narrow (ONS) Definition
Conven- CompariTotal
ience
son
5.0
2.2
6.6
4.5
2.0
5.9
4.7
2.1
6.2
4.7
2.1
6.2
4.6
2.1
6.1
4.7
2.1
6.1
4.8
2.1
6.4
5.0
2.0
6.9
5.5
1.7
7.8
6.0
2.1
8.5
6.5
2.0
9.3
7.3
2.2
10.5
7.8
2.3
11.2
8.5
2.3
12.0
9.1
2.4
12.8
9.6
2.4
13.5
10.0
2.4
14.1
10.4
2.4
14.7
10.8
2.5
15.2
11.1
2.5
15.6
11.4
2.5
15.9
11.6
2.6
16.2
11.8
2.6
16.4
12.0
2.6
16.6
12.2
2.6
16.8
Conceptual Issues
As mentioned earlier, the advent of the internet has raised conceptual as well as measurement
issues relating to the way that Non-Store Retail sales are treated in a retail-planning context.
One element of this is how to treat sales that are made online but where the goods are either
taken by store-staff from the shelves of company stores (as with Tesco) or where they are
picked up from the store (as with a number of large retailers). Tesco’s (who source most of their
online convenience goods sales from existing stores) online sales in the UK in 2013 were
estimated to be around £3.3bn, so it is quite possible that the majority of the estimated £5.8bn
difference between the Broad and Narrow estimates of Non-Store sales of convenience goods in
2013 was sourced from the shelves of existing stores.
Table 3.5 shows the impact of assuming that 90% of internet sales by companies who also have
a conventional store-based presence (e.g. Tesco) are sourced from existing stores, or are made
via Click & Collect. This has a big impact on the estimated non-store shares of convenience
goods. In 2014 the share falls from 7.3% in the Broad Definition to just 2.8% in the adjusted
version with only a modest increase after 2014. The 90% assumption may not, of course, hold in
38
the future. Tesco are already sourcing some orders from “dark” stores i.e. warehouses existing
purely to serve the online market.
A more difficult conceptual issue is how to deal with multichannel retailing. In some retail
business models, stores can be seen as showrooms for internet sales rather than as sales
points in their own right. The increased use of smartphone technology has started to blur the
store/internet boundary even further. Customers can now visit a few different stores, chose the
best product and later place an order using their smartphone. There are obviously viability and
sustainability issues if a company starts to simply act as a showroom for other companies’ sales,
but the increasing popularity of the multi-channel model implies that the phenomena is likely to
be around for some time to come.
Table 3.5 Non-Store Convenience goods – Adjusted Market Share
(% of Total Spending on Convenience Goods)
Total Adjusted* of which:
Part of NonNarrow
Narrow
Definition Definition
2002
2.5
2.3
2.2
0.0
2003
2.4
2.1
2.0
0.0
2004
2.8
2.2
2.1
0.1
2005
3.0
2.2
2.1
0.1
2006
3.2
2.2
2.1
0.1
2007
3.6
2.3
2.1
0.1
2008
4.3
2.4
2.1
0.2
2009
4.7
2.3
2.0
0.3
2010
4.8
2.0
1.7
0.3
2011
5.6
2.5
2.1
0.4
2012
5.9
2.4
2.0
0.4
2013
6.6
2.7
2.2
0.4
2014
7.3
2.8
2.3
0.5
2015
7.8
2.9
2.3
0.5
2016
8.2
2.9
2.4
0.6
2017
8.5
3.0
2.4
0.6
2018
8.9
3.1
2.4
0.6
2019
9.1
3.1
2.4
0.7
2020
9.3
3.2
2.5
0.7
2021
9.5
3.2
2.5
0.7
2022
9.6
3.2
2.5
0.7
2023
9.7
3.3
2.6
0.7
2024
9.8
3.3
2.6
0.7
2025
9.9
3.3
2.6
0.7
2026
9.9
3.4
2.6
0.7
The implication is that the “retail needs model” whereby the potential spending in-stores in a
location relative to sales densities is an indicator of the need for retail space may no longer be
appropriate. Another way of looking at this is to say that it is not appropriate to deduct the full
extent of estimated non-store sales from local spending when estimating spending available for
local store-based sales; although it is difficult, if not impossible, to say what share is appropriate.
39
4
Chapter 4: Retail Business
Turnover Potential
In this chapter:
 The Estimates - What is Available?
41
 Methodology - How They are Produced
41
 Detailed Category Definitions
42
The Estimates - What is Available?
The Retail Business Turnover Potential estimates show the turnover by kind of business that
would occur if the population and households living in the UK made their expenditure on each
goods type in line with the local Consumer Retail Expenditure estimates. Estimates are
provided for the same years as the Consumer Retail Expenditure estimates and in the same
price base to allow for a direct comparison.
As of the 2014/15 update, the Output Area estimates of Business Turnover Potential are no
longer produced. However, national summary forecasts are still presented here for reference.
Methodology - How They Are Produced
The national breakdown of expenditure by business categories uses the Annual Business
Survey (ABS) published by the ONS, which gives retail turnover figures for businesses
disaggregated to 4-digit SIC level.
Convenience and comparison store retail business categories below are defined in terms of the
SIC92 Groups and Classes included in each category. These definitions conform to those in
general use by retail planners. The Convenience and comparison business categories are:
Convenience Store Retail Businesses
 Class 52.11 Non-specialised stores with food, beverages or tobacco predominating.
 Group 52.2 Stores specialising in food, beverages and tobacco.
Comparison Store Retail Businesses
Specialised comparison store retail businesses
 Group 52.3 Stores specialising in pharmaceutical and medical goods, cosmetic and toilet
articles.
 Group 52.4 Stores specialising in the retail sale of other new goods.
Non-specialised store retail businesses
 Class 52.12 Non-specialised stores without food, beverages or tobacco predominating.
Non-Store Retail Businesses
Non-store retail businesses, comprising SIC92 Group 52.6, are not included in the
convenience/comparison classification. They include, for example, mail order and internet
shopping categories, and correspond closely to the special forms of trading explained on page
36 in Chapter 2.
41
This section describes the broad and detailed business categories. The categories include:
1. Mainly Food, Alcoholic Drink and Tobacco Stores
2. Stores Specialising in the Retail Sale of Clothing, Footwear and Leather Goods
3. Stores Specialising in the Retail Sale of Household Goods
4. Stores Specialising in the Retail Sale of Other Goods
5. Non-Specialised Stores without Food, Alcoholic Drink or Tobacco Predominating (SIC92 class
52.12)
6. Non-Store Businesses (SIC92 group 52.6)
7. Repair of Household and Personal Goods (SIC92 group 52.7)
1. Mainly Food, Alcoholic Drink and Tobacco Stores
1.1. Non-Specialised Stores with Food, Alcoholic Drink or Tobacco Predominating (SIC92
class 52.11)
The Non-Specialised Stores with Food, Alcoholic Drink or Tobacco Predominating sub-category includes
stores selling a large variety of goods, of which food products, beverages or tobacco are predominant. Apart
from their main sales of food products, beverages or tobacco, stores may have several other lines of
merchandise such as clothing, furniture, domestic appliances, hardware, cosmetics, etc. This class also
includes all non-specialist local co-operative societies.
Examples: Asda Stores, Fortnum and Mason, J Sainsbury, Martin Retail Group,
Netto Foodstores, Waitrose
1.2 Specialised Food Stores
The Specialised Food Stores sub-category includes:
1.2.1 Fruit and Vegetables (SIC92 class 52.21)
1.2.2 Meat and Meat Products (SIC92 class 52.22)
1.2.3 Fish, Crustaceans and Molluscs (SIC92 class 52.23)
1.2.4 Bread, Cakes, Flour Confectionery and Sugar Confectionery (SIC92 class 52.24)
1.2.5 Other Food, Beverages and Tobacco in Specialised Stores (SIC92 class 52.27)
1.3 Stores Specialising in the Retail Sale of Alcoholic and Other Beverages (SIC92 class
52.25)
The Stores Specialising in the Retail Sale of Alcoholic and Other Beverages includes stores that sell
alcoholic and other beverages.
Examples: Oddbins, Unwins, Victoria Wine Co
1.4 Stores Specialising in the Retail Sale of Tobacco (SIC92 class 52.26)
The Stores Specialising in the Retail Sale of Tobacco sub-category includes stores that sell tobacco.
Examples: Lawrence Hunt & Co, Rippleglen
42
2. Stores Specialising in the Retail Sale of Clothing, Footwear and Leather
Goods
2.1 Stores Specialising in the Retail Sale of Clothing (SIC92 class 52.42)
Stores specialising in the retail sale of articles of clothing, articles of fur, and clothing accessories such as
gloves, ties, braces, etc.
Examples: Austin Reed, Bridal Fashions, Dixon Sports, Mackays Stores, Marks &
Spencer, Matalan Discount Club (Cash & Carry), Monsoon
2.2 Stores specialising in the Retail Sale of Footwear and Leather Goods (SIC92 class
52.43)
Stores specialising in the retail sale of footwear, leather goods and travel accessories of leather and leather
substitutes.
Examples: Bally UK Sales, Clarks, Russell and Bromley, Schuh
3. Stores Specialising in the Retail Sale of Household Goods
3.1 Stores Specialising in the Retail Sale of Textiles (SIC92 class 52.41)
The Stores Specialising in the Retail Sale of Textiles sub-category includes stores specialising in the retail
sales of fabrics; knitting yarn; basic materials for rug, tapestry or embroidery making; household textiles such
as sheets, tablecloths or towels; haberdashery, needles, sewing threads, etc.
Examples: C & H Fabrics, Fabric Land
3.2 Stores Specialising in the Retail Sale of Furniture, Lighting and Household Articles
(SIC92 class 52.44)
The Stores Specialising in the Retail Sale of Furniture, Lighting and Household Articles sub-category
includes stores specialising in the retail sale of furniture; lighting equipment; non-electrical household
appliances; household utensils; cutlery, crockery, glassware, china and pottery; curtains, net curtains and
other household furnishing articles of textile materials; wood, cork goods (excluding cork floor tiles) and
wickerwork goods; household articles and equipment not elsewhere classified. This class excludes stores
specialising in the retail sale of antiques, which are classified as second-hand goods.
Examples: Courts Furnishers (UK), Habitat UK, Harveys Furnishing Group, Robert
Dyas, Royal Doulton (UK)
3.3 Stores Specialising in the Retail Sale of Electrical Household Appliances and Radio and
Television Goods (SIC92 class 52.45)
The Stores Specialising in the Retail Sale of Electrical Household Appliances and Radio and Television
Goods sub-category includes stores specialising in the retail sale of electrical household appliances: radio
and television goods and other household audio/visual equipment; musical records and audio/visual tapes,
CDs and cassettes.
Examples: Comet Group, HMV, Scottish Power
3.4 Stores Specialising in the Retail Sale of Hardware, Paints and Glass (SIC92 class 52.46)
The Stores Specialising in the Retail Sale of Hardware, Paints and Glass sub-category includes stores
specialising in the retail sale of do-it-yourself materials and equipment; lawn mowers, however operated;
hardware; paints, varnishes and lacquers; and other building materials such as bricks, wood and sanitary
equipment.
Examples: B&Q, Graham Group, Homebase Group, Wickes Building Supplies
43
4. Stores Specialising in the Retail Sale of Other Goods
4.1 Dispensing Chemists and Stores Specialising in the Retail Sale of Medical and
Orthopaedic Goods, Cosmetic and Toilet Articles (SIC92 group 52.3)
The Dispensing Chemists and Stores Specialising in the Retail Sale of Medical and Orthopaedic Goods,
Cosmetic and Toilet Articles sub-category comprises SIC92 classes 52.31 (dispensing chemists), 52.32 (retail
sale of medical and orthopaedic goods) and 52.33 (retail sale of cosmetic and toilet articles).
Examples: Lloyds Chemists, Scholl Consumer Products, Superdrug, Yves Rocher
(London)
4.2 Stores Specialising in the Retail Sale of Books, Newspapers and Stationery (SIC92 class
52.47)
The Stores Specialising in the Retail Sale of Books, Newspapers and Stationery sub-category includes stores
that sell books, newspapers and stationery. This class also includes stores specialising in the retail sale of
other supplies such as pens, pencils, paper, etc. This class excludes stores specialising in the retail sale of
second-hand or antique books, which are classified as second-hand goods.
Examples: Rymans, Staples, Waterstones, W H Smith
4.3 Stores Specialising in the Retail Sale of Other New Goods (SIC92 class 52.48)
The Stores Specialising in the Retail Sale of Other New Goods sub-category includes stores specialising in
the retail sale of sports goods, fishing gear, camping goods, boats and bicycles; games and toys, stamps and
coins; jewellery, clocks and watches; wallpaper; floor coverings; photographic, optical and precision
equipment; office supplies and equipment; computers and non-customised software; flowers, plants, seeds,
fertilisers, pet animals and pet foods; souvenirs, craft work and religious articles; household fuel oil, bottled
gas, coal and wood; weapons and ammunition; non-food products not elsewhere classified.
Examples: Allied Carpets, Allsports (Retail), Birthdays, Country Garden Centres,
Dolland and Aitchison, Hamleys of London, Notcutts, PC World, Pet City,
Sportsworld (GB), The Carphone Warehouse, Wyevale Garden Centres, Wax Lyrical,
YHA Adventure Shops.
4.4 Stores Specialising in the Retail Sale of Second-Hand Goods (SIC92 class 52.50)
The Stores Specialising in the Retail Sale of Second-Hand Goods sub-category includes stores specialising
in the retail sale of antiques, second-hand books and other second-hand goods. This class excludes stores
specialising in the retail sale of second-hand vehicles, which are classified in the Motoring sector.
Examples: Partridge Fine Arts, Scope
5. Non-Specialised Stores without Food, Alcoholic Drink or Tobacco
Predominating (SIC92 class 52.12)
The Non-Specialised Stores without Food, Alcoholic Drink or Tobacco Predominating category includes stores
selling a large variety of goods of which food products, beverages and tobacco should not be predominant. It
includes activities of department stores carrying a general line of merchandise including clothes, furniture,
appliances, hardware, cosmetics, jewellery, toys, sporting goods, etc.
Examples: Harrods, John Lewis, Mothercare UK, Oxfam, The National Trust
(Enterprises)
44
6. Non-Store Businesses (SIC92 group 52.6)
The Non-Store Businesses category comprises SIC92 classes 52.61, 52.62 and 52.63. This category includes
retail businesses selling any kind of product by mail order; via television, radio and telephone; in a usually
moveable stall either along a public road or on a fixed market place; by door-to-door sales persons; by vending
machines, by mobile sellers. Mail order trading is defined as where goods are sent to the buyer, who made the
choice on the basis of advertisements, catalogues, models or any other means of advertising.
Examples: Betterware UK, Freemans, GUS Home Shopping, Lakeland, Software
Warehouse, Vendcare Services, Weekender Ladies Wear
7. Repair of Household and Personal Goods (SIC92 group 52.7)
The Repair of Household and Personal Goods category includes businesses specialising in repair of boots,
shoes, and other articles of leather; repair of electrical households goods; repair of watches, clocks and
jewellery; repair of bicycles; alteration of clothing; repair not elsewhere classified.
45
5
Chapter 5: Using the Retail
Business Turnover Potential
Estimates
In this chapter:
 Estimates of earlier data
47
 Recent trends
47
 Longer-Run Trends
47
 Trend projections
50
 Prices
57
Estimates of Earlier Data
Data classified to SIC(92) categories are available from the ABS for years 1995-2007 in current
prices, however for years 2008-2013 the ABS data is published for the SIC(07) categories and is
mapped back to SIC(92) to match the older data. Data from the ONS Retail Sales Inquiry relating
to retail expenditure by type of store and commodity are available for 1988 - 2014 on a constant
and current price basis. This data matches the ABS data and is used to calculate deflators to give
a constant price series from the current price ABS data. Retail sales data are also used to extend
the constant price data backwards to produce a longer-run estimation.
Retail Sales Business Monitor SDM28 data is available back to 1971 for the broader categories of
store retailing, which closely match the broad Pitney Bowes categories. Expenditure per capita is
calculated and analysed from 1971 onwards for convenience goods stores and comparison goods
stores, as well as the broader component categories within them. Data for all retail business is
available from 1964 onwards, allowing ultra-long term trend analysis for this aggregate. Data for
non-store retailing and repair are only available starting from 1986, although this component is
small and very erratic, giving statistically insignificant estimates of trend growth.
Recent Trends
After remaining flat in 2012, latest data reveals that all retail businesses expenditure per capita
grew by 0.8% in 2013. However, per capita expenditure in convenience stores fell by 1.5% in 2013,
making it the seventh consecutive year of contraction. In contrast to convenience stores, per capita
expenditure in comparison stores grew by 2.1% in 2013, a relatively strong performance. But it
was the 9.7% growth in non-store business expenditure per capita that really outpaced spending
in all other store types.
Average annual consumer retail expenditure per capita for the UK is shown in Table 5.1 for years
1988 to 2013 for convenience and comparison store businesses, all store businesses, non-store
businesses and all retail businesses. To match the consumer spending data, business expenditure
is presented in constant 2011 prices, with year on year percentage changes.
Longer-Run Trends
Table 5.2 shows the compound annual growth rates (CAGR) of per capita expenditure by store
type in constant (2011) prices over various time periods. Over the 49 years from 1964 to 2013 allbusiness consumer retail expenditure per capita grew at an estimated average annual rate of 2.1%,
while the highest growth of 2.4% was seen over the period of 1983-2013.
Historical growth rates for comparison stores are generally higher than those of all businesses;
accelerating from 2.8% for the period of 1978-2013, to 3.5% for the period of 1998-2013, and then
slowing to 1.5% for the period of 2003-2013 as the global recession hit the UK economy.
For expenditure at convenience businesses the differences in average annual growth rates are less
pronounced, with a gradual slowdown from 1.8% for the period of 1978-2013, to 1.1% for the
period of 1998-2013, and just 0.4% for the period of 2003-2013.
47
Table 5.1: UK average retail expenditure per capita (2011 prices) and annual percentage changes
Conv. store
business
48
Comparison store business
Specialist
Mixed
Total
All store
business
Non-store
business
All retail
business
£
£
£
£
£
£
£
1988
1,755
1,003
227
1,231
2,986
148
3,134
1989
1,782
1,047
229
1,276
3,058
149
3,207
1.5%
4.4%
0.6%
3.7%
2.4%
0.6%
2.3%
1990
1,796
1,070
229
1,300
3,096
150
3,245
0.8%
2.2%
0.3%
1.9%
1.2%
0.3%
1.2%
1991
1,812
1,025
226
1,252
3,063
140
3,204
0.9%
-4.2%
-1.3%
-3.7%
-1.1%
-6.2%
-1.3%
1992
1,838
1,014
227
1,241
3,079
135
3,214
1.5%
-1.1%
0.1%
-0.9%
0.5%
-3.8%
0.3%
1993
1,868
1,035
235
1,270
3,138
138
3,277
1.7%
2.1%
3.6%
2.4%
1.9%
2.5%
2.0%
1994
1,917
1,067
237
1,304
3,222
139
3,361
2.6%
3.1%
0.9%
2.7%
2.7%
0.7%
2.6%
1995
1,949
1,067
237
1,304
3,253
129
3,381
1.6%
0.0%
-0.1%
0.0%
1.0%
-7.6%
0.6%
1996
1,985
1,098
250
1,348
3,333
130
3,463
1.9%
2.9%
5.5%
3.4%
2.5%
0.7%
2.4%
1997
1,969
1,144
252
1,397
3,366
134
3,500
-0.8%
4.2%
1.0%
3.6%
1.0%
3.6%
1.1%
1998
2,083
1,198
258
1,457
3,539
141
3,680
5.7%
4.7%
2.4%
4.3%
5.1%
5.2%
5.1%
1999
2,113
1,263
271
1,535
3,647
155
3,802
1.4%
5.4%
5.0%
5.4%
3.1%
9.7%
3.3%
2000
2,140
1,374
276
1,650
3,790
170
3,960
1.3%
8.8%
1.8%
7.5%
3.9%
9.4%
4.1%
2001
2,194
1,456
310
1,766
3,960
185
4,145
2.5%
6.0%
12.5%
7.0%
4.5%
9.1%
4.7%
2002
2,261
1,616
338
1,954
4,215
168
4,383
3.1%
11.0%
8.7%
10.6%
6.4%
-9.2%
5.7%
2003
2,353
1,716
354
2,070
4,424
170
4,593
4.1%
6.2%
4.8%
6.0%
5.0%
1.1%
4.8%
2004
2,442
1,780
371
2,150
4,592
194
4,786
3.8%
3.7%
4.7%
3.9%
3.8%
14.1%
4.2%
2005
2,492
1,849
361
2,211
4,702
199
4,901
2.0%
3.9%
-2.5%
2.8%
2.4%
2.5%
2.4%
2006
2,582
1,916
393
2,309
4,891
199
5,090
3.6%
3.6%
8.8%
4.4%
4.0%
0.1%
3.9%
2007
2,570
1,971
396
2,366
4,936
219
5,155
-0.5%
2.9%
0.7%
2.5%
0.9%
10.2%
1.3%
2008
2,568
1,961
422
2,384
4,952
220
5,172
-0.1%
-0.5%
6.8%
0.7%
0.3%
0.5%
0.3%
2009
2,562
1,949
425
2,374
4,936
245
5,181
-0.2%
-0.6%
0.6%
-0.4%
-0.3%
11.3%
0.2%
2010
2,542
1,963
431
2,393
4,935
255
5,190
-0.8%
0.7%
1.3%
0.8%
0.0%
3.9%
0.2%
2011
2,501
1,921
436
2,356
4,857
282
5,139
-1.6%
-2.1%
1.2%
-1.5%
-1.6%
10.6%
-1.0%
2012
2,485
1,902
447
2,349
4,834
303
5,137
-0.6%
-1.0%
2.6%
-0.3%
-0.5%
7.4%
0.0%
2013
2,449
1,937
462
2,398
4,847
332
5,180
-1.5%
1.8%
3.3%
2.1%
0.3%
9.7%
0.8%
Table 5.2: Average annual growth rates of retail expenditure per capita (2011 prices)
Conv. store
business
Specialist
Mixed
Total
All store
business
Non-store
business
All retail
business
1964-13
-
-
-
-
1.6%
-
2.1%
1978-13
1.8%
2.8%
3.2%
2.7%
2.3%
-
2.4%
1983-13
1.6%
3.0%
3.3%
2.9%
2.4%
-
2.4%
1988-13
1.3%
3.0%
3.0%
2.7%
2.2%
-
2.0%
1993-13
1.4%
3.2%
3.6%
3.2%
2.3%
4.3%
2.3%
1998-13
1.1%
3.5%
4.0%
3.4%
2.5%
5.8%
2.3%
2003-13
0.4%
1.5%
3.6%
1.5%
1.4%
7.3%
1.2%
Oxford Economic's forecasts of retail expenditure per capita and average annual growth rates
2020 (£)
2013-20
2,495
0.3%
2,412
3.2%
559
2.8%
2,971
3.1%
5,466
1.7%
402
2.8%
5,869
1.8%
2026 (£)
2013-26
2,689
0.7%
2,855
3.0%
656
2.7%
3,511
3.0%
6,200
1.9%
472
2.7%
6,672
2.0%
NOTE: forecast of expenditure eg 2013-20 includes annual growth from the 2013 level to the 2020 level.
49
Trend Projections
Projections of UK average annual consumer retail expenditure per capita by business category at
constant 2011 prices are shown in Table 5.3. These are based on time-series analysis of past
expenditure estimates over different time periods. Log-linear regression lines were fitted to the data
using the method of least squares, and 95% confidence limits calculated for both lines and points.
Selected trend lines and the 95% confidence limits for the points are shown in Figures 5.1 to 5.9 for
convenience stores, comparison stores and all businesses.
Projections for expenditure in convenience and comparison stores given in Table 5.3 are from 1978
onwards only, due to our concerns regarding the precise comparability of the earlier data.
Expenditure at all businesses is not affected by these limitations, and alternative projections from
1964 are given.
The likelihood of the four forecasts occurring (i.e. deciding between those based on short term,
medium term, long term or ultra-long term trends) will depend on the wider assessment of the
economy. In addition, different forecast periods suit the two types of business spending, for
example the short term trend (2003-2013) best suits comparison store spending, whereas ultralong term trend (1978-2013) best suits convenience store spending. In our view, the short term
projections for convenience stores are less reliable than the medium term trends due to the
considerable variation in growth rates in recent years. At the same time for comparison stores all
trends fit relatively well, but given the boom experienced during the late 1990s and early 2000s the
most likely growth is expected somewhere in between the long and short term projections (i.e.
projections that give less weight to those years of high growth).
An alternative to trend-based projections is also provided by Oxford Economics. Forecasts derived
from appropriate categories of goods from Oxford Economics’ UK consumer spending model are
shown in Table 5.2. These forecasts are based partly upon past trends, but also upon expected
changes in other economic variables of interest according to historic relationships. As a result, the
forecasts show that, despite strong growth in the recent past, average growth for all retail business
throughout the forecast period 2013-2026 (2%) will be slightly below the historical trend rates. For
instance, although sales in the all retail business aggregate have grown strongly during the early to
mid-2000s, this has been reflective of consumer boom conditions, including households adjusting to
a stable macro environment, rising house prices, low real interest rates and increasing consumer
debt. During the downturn of 2008-2011 all retail spending has been much weaker, so as the
economic recovery continues we expect retail spending to pick up but not quite reach the prerecession growth rates.
50
Table 5.3: Growth and projections of UK annual average consumer retail expenditure per capita by
business type (2011 prices)
Ultra long term trends
1964-2013
Long term trends
Medium term trends
Short term trends
1983-2013
1993-2013
2003-2013
1978-2013
All
retail
Conv.
store
Comp.
store
All
retail
Conv.
store
Comp.
store
All
retail
Conv.
store
Comp.
store
All
retail
Conv.
store
Comp.
store
All
retail
Correlation coefficient
0.975
0.967
0.954
0.975
0.952
0.945
0.963
0.859
0.912
0.920
0.068
0.678
0.633
Average annual growth
2.4%
2.0%
3.2%
2.7%
1.9%
3.3%
2.6%
1.7%
3.9%
2.8%
0.2%
1.2%
1.0%
95% confidence limits
(+/-0.11)
(+/-0.13) (+/-0.24) (+/-0.15) (+/-0.16) (+/-0.3) (+/-0.19) (+/-0.33) (+/-0.57) (+/-0.39) (+/-0.62) (+/-0.64) (+/-0.56)
Actual and projected expenditure per capita (2011 prices) and 95% confidence limits for the regression points and lines
2013 expenditure
95% limits:
£
£
£
£
£
£
£
£
£
5,180
2,449
2,398
5,180
2,449
2,398
5,180
2,449
2,398
5,180
2,449
2,398
5,180
2,761
2,576
5,678
2,732
2,621
5,647
2,694
2,734
5,703
2,531
2,449
5,295
(+/-228)
(+/-405)
(+/-545)
(+/-229)
(+/-415)
(+/-573)
(+/-267)
(+/-468)
(+/-661)
(+/-191)
(+/-190)
(+/-347)
-Line
(+/-167)
(+/-70)
(+/-124)
(+/-167)
(+/-75)
(+/-135)
(+/-187)
(+/-101)
(+/-177)
(+/-251)
(+/-100)
(+/-100)
(+/-165)
5,578
2,816
2,657
5,829
2,784
2,709
5,795
2,740
2,840
5,861
2,537
2,480
5,347
-Points
(+/-645)
(+/-234)
(+/-420)
(+/-562)
(+/-235)
(+/-431)
(+/-591)
(+/-274)
(+/-492)
(+/-687)
(+/-199)
(+/-200)
(+/-363)
-Line
(+/-176)
(+/-74)
(+/-133)
(+/-178)
(+/-80)
(+/-146)
(+/-201)
(+/-111)
(+/-198)
(+/-277)
(+/-114)
(+/-115)
(+/-190)
5,711
2,872
2,741
5,985
2,836
2,799
5,947
2,787
2,951
6,023
2,543
2,511
5,399
-Points
(+/-661)
(+/-240)
(+/-435)
(+/-579)
(+/-241)
(+/-448)
(+/-610)
(+/-282)
(+/-517)
(+/-714)
(+/-208)
(+/-211)
(+/-380)
-Line
(+/-185)
(+/-79)
(+/-143)
(+/-191)
(+/-85)
(+/-158)
(+/-216)
(+/-120)
(+/-220)
(+/-305)
(+/-128)
(+/-130)
(+/-218)
6,421
3,168
3,204
6,830
3,114
3,297
6,767
3,033
3,570
6,904
2,571
2,670
5,668
-Points
(+/-753)
(+/-271)
(+/-521)
(+/-677)
(+/-273)
(+/-545)
(+/-717)
(+/-329)
(+/-670)
(+/-877)
(+/-261)
(+/-278)
(+/-494)
-Line
(+/-239)
(+/-105)
(+/-201)
(+/-262)
(+/-116)
(+/-231)
(+/-304)
(+/-176)
(+/-358)
(+/-469)
(+/-201)
(+/-215)
(+/-369)
95% limits:
£
5,449
95% limits:
£
(+/-628)
95% limits:
£
-Points
95% limits:
£
7,392
3,565
3,862
8,001
3,483
4,014
7,903
3,359
4,487
8,134
2,606
2,875
6,009
-Points
(+/-882)
(+/-315)
(+/-650)
(+/-820)
(+/-320)
(+/-694)
(+/-877)
(+/-401)
(+/-928)
(+/-1138)
(+/-339)
(+/-384)
(+/-674)
-Line
(+/-320)
(+/-143)
(+/-294)
(+/-372)
(+/-160)
(+/-347)
(+/-440)
(+/-257)
(+/-593)
(+/-729)
(+/-294)
(+/-334)
(+/-577)
51
Figure 5.1: Convenience store business - long term trends (1983-13)
Actual expenditure
Expenditure trend
26
24
22
2020
18
16
14
12
2010
08
06
04
02
1,000
2000
1,000
98
1,500
96
1,500
94
2,000
92
2,000
1990
2,500
88
2,500
86
3,000
84
3,000
82
3,500
1980
3,500
78
4,000
76
4,000
OE Forecast
Figure 5.2: Convenience store business - medium term trends (1993-13)
Actual expenditure
52
Expenditure trend
26
24
22
2020
18
16
14
12
2010
08
06
04
02
1,000
2000
1,000
98
1,500
96
1,500
94
2,000
92
2,000
1990
2,500
88
2,500
86
3,000
84
3,000
82
3,500
1980
3,500
78
4,000
76
4,000
OE Forecast
Figure 5.3: Convenience store business - short term trends (2003-13)
Actual expenditure
Expenditure trend
26
24
22
2020
18
16
14
12
2010
08
06
04
02
1,000
2000
1,000
98
1,500
96
1,500
94
2,000
92
2,000
1990
2,500
88
2,500
86
3,000
84
3,000
82
3,500
1980
3,500
78
4,000
76
4,000
OE Forecast
Figure 5.4: Comparison store business - long term trends (1983-13)
5,500
5,500
5,000
5,000
4,500
4,500
4,000
4,000
3,500
3,500
3,000
3,000
2,500
2,500
2,000
2,000
1,500
1,500
1,000
1,000
Actual expenditure
Expenditure trend
26
24
22
18
2020
16
14
12
2010
08
06
04
02
2000
98
96
94
92
1990
88
86
84
82
1980
78
500
76
500
OE Forecast
53
Figure 5.5: Comparison store business - medium term trends (1993-13)
5,500
5,500
5,000
5,000
4,500
4,500
4,000
4,000
3,500
3,500
3,000
3,000
2,500
2,500
2,000
2,000
1,500
1,500
1,000
1,000
Actual expenditure
Expenditure trend
26
24
22
2020
18
16
14
12
2010
08
06
04
02
2000
98
96
94
92
88
1990
86
84
82
1980
78
500
76
500
OE Forecast
Figure 5.6: Comparison store business - short term trends (2003-13)
5,500
5,500
5,000
5,000
4,500
4,500
4,000
4,000
3,500
3,500
3,000
3,000
2,500
2,500
2,000
2,000
1,500
1,500
1,000
1,000
Actual expenditure
54
Expenditure trend
26
24
22
2020
18
16
14
12
2010
08
06
04
02
2000
98
96
94
92
1990
88
86
84
82
78
1980
500
76
500
OE Forecast
Figure 5.7: All retail business - long term trends (1983-13)
Actual expenditure
Expenditure trend
26
24
22
2020
18
16
14
04
12
1,000
2010
1,000
08
2,000
06
2,000
02
3,000
2000
3,000
98
4,000
96
4,000
94
5,000
92
5,000
1990
6,000
88
6,000
86
7,000
84
7,000
82
8,000
1980
8,000
78
9,000
76
9,000
OE Forecast
Figure 5.8: All retail business - medium term trends (1993-13)
Actual expenditure
Expenditure trend
26
24
22
2020
18
16
14
12
2010
1,000
08
1,000
06
2,000
04
2,000
02
3,000
2000
3,000
98
4,000
96
4,000
94
5,000
92
5,000
1990
6,000
88
6,000
86
7,000
84
7,000
82
8,000
1980
8,000
78
9,000
76
9,000
OE Forecast
55
Figure 5.9: All retail business - short term trends (2003-13)
Actual expenditure
56
Expenditure trend
26
24
22
2020
18
16
14
12
2010
1,000
08
1,000
06
2,000
04
2,000
02
3,000
2000
3,000
98
4,000
96
4,000
94
5,000
92
5,000
1990
6,000
88
6,000
86
7,000
84
7,000
82
8,000
78
8,000
1980
9,000
76
9,000
OE Forecast
Prices
The price indices of consumer retail expenditure by business category for the years 1989 to 2013
are given in Table 5.4. These indices are calculated from retail sales by business category at
current and constant prices published in the ONS Retail Sales Inquiry. The indices are therefore
entirely compatible with the estimates of consumer retail expenditure per capita given in Table 5.1.
Retail prices have been generally falling in comparison stores since the late-1990s, with 2010
prices 16% below the 1998 levels. These falls have been most pronounced for products such as
electronics and computing, in line with technological advances and the movement of production to
lower cost countries, especially China and India, feeding through into prices. Since 2010, however,
the prices of comparison goods stores have been flat, in part reflecting wages rising in these
emerging economies. The same trend is also evident in non-store businesses, where between
1998 and 2013 prices declined by 11%. In contrast, convenience goods stores have experienced
steady inflation over time, with price rises averaging 2.9% per year between 1989 and 2013.
Table 5.4: Price indices of consumer retail expenditure by business type (2011=100)
Conv. Store
business
Specialist
Mixed
Total
All store
business
Non-store
business
All retail
business
1989
54.8
100.9
87.0
98.6
79.1
93.1
69.0
1990
58.9
105.3
91.9
103.1
83.3
98.0
73.5
1991
62.8
109.8
97.9
107.8
86.9
102.9
77.8
1992
65.2
111.4
101.4
109.7
88.6
105.3
80.1
1993
67.1
113.1
103.6
111.4
90.4
106.8
81.9
1994
67.9
113.8
104.9
112.3
91.2
107.8
82.6
1995
70.6
115.3
107.6
114.0
92.9
109.5
84.8
1996
73.0
116.9
110.0
115.7
94.9
111.1
86.8
1997
73.9
116.5
111.5
115.6
95.7
111.5
88.3
1998
75.6
116.2
112.6
115.6
96.2
111.9
89.7
1999
76.9
114.9
112.0
114.4
96.3
111.0
90.3
2000
77.3
112.8
109.7
112.3
95.7
109.2
90.7
2001
75.9
113.3
102.2
111.5
95.2
99.7
89.3
2002
76.0
110.3
99.8
108.7
94.0
97.3
87.9
2003
76.7
108.1
98.4
106.6
93.1
96.6
87.6
2004
77.2
105.3
96.8
104.0
91.7
96.0
87.2
2005
78.2
102.7
95.8
101.6
90.7
96.0
87.3
2006
79.8
100.8
95.3
99.9
90.4
95.4
87.7
2007
82.5
99.3
95.4
98.7
91.0
95.4
88.6
2008
88.1
98.2
95.9
97.8
93.0
96.8
91.9
2009
91.8
96.8
96.2
96.7
94.2
95.8
92.2
2010
94.9
98.0
97.8
98.0
96.4
97.8
95.4
2011
100.0
100.0
100.0
100.0
100.0
100.0
100.0
2012
102.9
100.4
100.1
100.4
101.7
100.2
101.6
2013
106.2
100.2
99.8
100.1
103.3
100.1
102.7
57
A
Appendix A: Base Area
Profile Report
To view information on Consumer Retail Expenditure estimates produced from
Pitney Bowes enabling comparisons on a consistent basis between local area
figures and the National average, click here.
Please note that the figures (in the attached XLS file) are given for the United
Kingdom and Great Britain for 2012, 2013, 2014, 2019, 2024 and 2026

Retail Expenditure Guide 2015/2016

Transcription

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