FSP Retail Blog

Early on in my FSP career I was instructed in the value of “Value”. The Value of Retail Sales, in the rawest possible form, completely un-corrupted by seasonal fiddles and unaffected by the transmogrification to Volume as defined in ONS speak here:

“The value of retail sales reported via the monthly survey is converted to a chained volume basis using weighted contributions of price indices for various categories of retail goods.”

Right.

So, ONS have their reasons, and the journalists are now on a feeding frenzy as ONS admit they could have done it differently. What is unequivocal is that despite the re-basing to 2005 (they could do that at any time), what FSP has quoted through SnapShop is still true. Seems our decision to stick to Value is entirely merited and I asked Geoff, our MD, to explain why

“For exactly the reasons that have got ONS into trouble. We take the figures as raw as possible. As soon as you start adjusting figures, there is potential not only for error but for dispute. Even adjusting for seasonality, e.g. date of Easter, is difficult to get right. Value is what the retailer sees – most do not formally adjust their figures at all. And why do we want volume – you can’t pay your bills with volume – value is what matters.

“The whole volume issue is fraught because of the issue of comparability. Is the white shirt included this month really of the same quality as the white shirt included last month? The price checking is conducted by market research interviewers and once you introduce people, hard facts get edged out by subjectivity and black and white becomes grey”.

For more on what Geoff thinks, you can read Geoff’s view in SnapShop Monthly and see the ONS Retail Sales Unadjusted Value figures along with other key economic indicators our UK Overview