Response to latest ONS retail statistics
Commenting on today’s Office for National Statistics (ONS) Retail sales, Great Britain: December 2017, Gary Childs, head of analytics, at Callcredit Information Group, said: “The latest ONS statistics around retail sales for December 2017 show slight growth compared to December 2016, with the quantity bought increasing by 1.4%, despite inflation rates creating a challenging environment for consumers. A continuing trend has been the bringing forward of purchases to late November to take advantage of Black Friday deals, as well as the increase in consumer spending online.
“This increase could be fuelled by borrowing, according to some estimates as much as 31% of consumers used credit to finance some of their Christmas spend. Given that UK consumers are some of the most generous in Europe, this could result in significant credit demand in January.
“As consumers receive their January credit statements and start to review their finances, they will likely look for more affordable and convenient forms of credit to help pay off the debt they took on over the holidays. Lenders must therefore ensure they are making the credit application process as streamlined as possible during this busy time. In fact, two thirds of consumers that we surveyed said they would wait no longer than 60 seconds for credit history checks over the phone or online. This clearly illustrates the need for lenders to provide fast and efficient decision services.
“The advent of Open Banking, in turn, creates another great opportunity for retailers, finance providers and consumers alike. Although adoption will be slow initially, more consumers will become aware of the opportunities that Open Banking offers as the year progresses and this will be reflected in increased demand for improved, more personalised services in the lending industry. While the lending industry will be able to take advantage of a better knowledge of consumer spend behaviours, better anticipating needs, tailoring their products and making more accurate lending decisions.”