APPENDIX 5
Memorandum from the British Retail Consortium
INTRODUCTION
BRC represents 90 per cent of the total retail
trade in the UK, operating in excess of 320,000 shops and stores,
occupying over 30 per cent of commercial property portfolio by
floor space.
Membership covers all forms of retailing, from
the large multiples and department stores, through to the corner
shop, from food and drink to furniture and DIY, from centre of
town to rural, to mail order and electronic commerce.
Retailing is a major engine of employment growth
in the economy, creating 58,500 new jobs (41,400 of them being
full-time positions) during 1999.
The British Retail Consortium welcomes this
opportunity to provide an input into the Treasury sub-Committee
inquiry into the launch of National Statistics. Retailing is a
significant part of the economy, accounting for 10 per cent (2.4
million employees) of all employment and 26 per cent of GDP by
expenditure. Increased scrutiny by government of the retail sector
makes reliable statistical data an essential requirement.
SUMMARY OF
KEY POINTS
BRC is broadly supportive of the Framework for
National Statistics.
If the National Statistics logo is going to
be seen as a guarantee of quality; non-government producers of
statistics should be able to apply for its use on approved series.
Ministers should not have the power to prevent
inclusion of statistics produced by their departments within the
scope of National Statistics.
BRC expects to see vast improvements in the
accuracy and timeliness of data relating to the retail sector.
National Statistics should be made available
on a UK basis. The current situation where some series relate
to GB and others to UK is unhelpful to users.
National Statistics should be meaningful to
the sectors to which they relate.
BRC welcomes the commitment to focus on relevance
of statistics produced.
Users should be consulted before series are
discontinued, and incompatible sectors should not be aggregated
for statistical series.
In order to minimise burdens on data suppliers,
BRC suggests that data be accepted in the form in which it is
convenient for the supplier to provide it, either electronically
or on company printouts.
For companies that operate in all regions of
the UK, requests for data from the ONS and each of the devolved
administrations would be unwelcome. We suggest the data is collected
centrally and disseminated as required.
FRAMEWORK FOR
NATIONAL STATISTICS
BRC is supportive of the need for official statistics
that are more user-focused, and particularly welcomes the commitment
to review key outputs at least every five years. Not only do outputs
need to be reviewed for quality, but also relevance.
COVERAGE OF
NATIONAL STATISTICS
According to the Framework, National Statistics
are to provide a comprehensive description of the UK economy and
society. BRC welcomes the guarantee of the quality that the logo
National Statistics will provide, but would question why only
statistics produced by government departments and the devolved
administrations should be eligible to display the logo. The National
Statistician and the Statistics Commission could provide a valuable
service in assessing the quality of statistics produced by non-government
bodies. In cases where non-government statistics are in common
use, for example the various consumer confidence or house price
indices, the publishers of these statistics should be able to
apply to the Statistics Commission for audit. If the quality of
the statistics meets the standards set, then the right to display
the National Statistics logo should be given. This would help
users of statistics by providing a guarantee of quality, and would
remove the need for the Office for National Statistics to begin
publishing statistical series that the private sector already
covers. If the Statistics Commission is to be a source of high
quality and independent advice on statistical issues, whose advice
is available to the wider public, it should not limit itself to
advice on government statistics.
BRC would also argue that it should not be for
ministers to agree whether or not statistics produced by their
department should be included within the scope of National Statistics,
the decision should be made by the Statistics Commission or National
Statistician on the basis of quality and relevance.
"AN ACCURATE,
UP-TO-DATE,
COMPREHENSIVE AND
MEANINGFUL DESCRIPTION
OF THE
UK ECONOMY AND
SOCIETY"
This is a laudable aim for National Statistics,
but at present retail statistics would fall far short on accuracy,
timeliness, being comprehensive or meaningful. BRC assumes that
the following issues will be addressed before statistics relating
to retail are categorised as national Statistics.
Accuracy
Data for the monthly retail sales index (RSI)
is requested from retailers. The weeks comprising the month are
currently a matter of choice for retailers, so long as they state
which weeks are used on the form. Retail sales can vary hugely
between weeks, especially around Bank Holidays or in the run-up
to Christmas. Accurate information on the state of the market
can only be obtained if the Office for National Statistics insists
that the correct weeks are included on the monthly return.
Up-to-Date
The "Annual" Business Inquiry relating
to retail has just been published (September 2000). It contains
1998 data. The latest available data on retail outlet numbers
is from 1996; several of the country's largest shopping centres
have opened since then.
Comprehensive
The monthly retail sales index covers only Great
Britain. Virtually all other important economic statistics cover
the United Kingdom. It is not possible to calculate retail sales
as a percentage of household spending when sales data are only
available for GB, and spending data are only available for UK.
Meaningful
BRC members do not see volume of sales as a
meaningful measure. Retailers provide the ONS with the value of
sales in each period, ie money taken through the till. The ONS
then apply a deflator and seasonal adjustment. In a time of price
deflation, an increase in sales volumes can simply reflect extra
sales that are being bought at the expense of retailers' margins.
In the short term, volume of sales could be increased almost infinitely
by retailers giving away goods. Seasonal adjustments are also
contentious. The seasonal adjustment applied to, for example December
and January sales, is massive. Average weekly sales in January
are around two thirds of their December level, and in some sectors,
sales activity drops by more than half. Additionally, seasonal
adjustment necessarily relies on a consistent pattern; retailing
is constantly changing, as are patterns of consumer spending.
RELEVANCE AND
USER FOCUS
BRC would welcome a greater focus on relevance
and the needs of the user. This will entail complete rethinking
on some ONS series related to retail. For example, manufacturing
is measured in terms of amounts of each good produced; it would
be logical for retail sales to be measured in the same way, ie
amount/value of each good sold. Instead, the measure is sales
by each category of retailer. There are two reasons that this
does not provide meaningful data:
(i) Categories of retailer are largely irrelevant
in the modern retail world. Food retailers are increasingly selling
fashion and homewares, and clothing retailers are developing mail
order offerings;
(ii) There are also some bizarre outcomes
from the categorisation of retailers, rather than what they sell.
For example, none of Boots sales get categorised in "pharmaceutical,
medical, cosmetic and toilet goods" in the monthly publication
of sales data (SDM 28). Equally the clothing category only includes
sales by retailers categorised as clothing retailers; sales of
clothing by department stores are not included.
There is also an argument that retail should
be recorded as productive activity in its own right, rather than
simply in terms of the volume and price of goods sold.
In terms of user focus, some consultation would
be appreciated before statistics are arbitrarily dropped. A case
in point is number of retail outlets, which has previously been
included in the Annual Business Inquiry. The number of retail
outlets has been dropped from the retail ABI in order to bring
it into line with ABIs for other sectors. Whilst it is understandable
that the number of sites is not of interest for some sectors;
it is very much so for retail. Number of outlets is a key factor
in level of competition in the sector.
Additionally, BRC would ask that investment
data be published for retail separately from hotels and restaurants.
Users of statistics are not well served by grouping sectors that
have little in common.
MINIMISING THE
BURDENS ON
DATA SUPPLIERS
In terms of minimising the burden on data providers,
BRC would draw attention to the point that data providers and
data users within retail companies are often in separate departments.
The data users would want as much detailed information on sales,
employment, store numbers etc as possible. To reduce the burden
for data providers, ONS needs to be flexible in how output is
received (print out, electronic transfer etc) and to give adequate
notice of new data requirements to allow for necessary computer
reprogramming. If ONS and other Government departments, such as
DTI and Customs and Excise, shared data it would prevent retailers
being asked for the same information by several different Government
departments.
One example of current duplication is that the
70 largest retailers provide ONS with a seven category split of
their retail sales which is used in calculating quarterly household
expenditure. A separate six category split from the 43 largest
retailers is used to provide the commodity breakdown on the Retail
Sales First Release. It appears that, the two sections of the
ONS which collect the monthly and quarterly data from 43 of the
same retailers do not communicate with each other.
Small retailers, who do not have specialist
data analysis departments, find form filling for ONS purposes
a particular burden. The main reason for this is that the analysis
required does not necessarily correspond with the records small
retailers keep for their own purposes. This applies especially
to partnerships, which are not obliged to submit returns to Companies
House. As small firms are selected at random to submit data, they
do not have in place the systems to collate the required data
quickly. BRC suggests that ONS should publish and distribute details
of the data they require and the way in which they collect it
to all retailers; small firms would then be forewarned and better
prepared when the demand for them to supply data arrived.
DEVOLUTION
BRC welcomes the aim of the Scottish Executive
and Welsh Assembly "to ensure that the statistical needs
of devolved areas are met and allow comparisons to be made".
We look forward to seeing the publication of more timely statistics
for the devolved regions.
In terms of Northern Ireland, BRC would suggest
that retail sales data from the Province must be included in the
monthly releases. Detailed employment data should also be made
available for the whole UK, not just GB.
In terms of collection of data, BRC would urge
against data requests being sent out from each of the ONS, the
Scottish Executive, the National Assembly for Wales and the Northern
Ireland Executive. Large retail companies will operate in all
of the devolved regions, but data will often be compiled only
at head office. BRC would therefore suggest that one request is
sent, from ONS asking for all information required, and that the
data for the devolved administrations is disseminated by ONS.
CONCLUSION
BRC eagerly awaits the improvements the new
framework has been designed to bring.
October 2000
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