UK retail sales values were up 1.3% on a like-for-like basis from March 2011, when they were down 3.5% on a year ago. On a total basis, sales were up 3.6%, against a 1.9% decline in March 2011.
The 3-month average total growth was 2.1%, just below the 12-month trend of 2.4%. A clearer underlying picture should appear in April, when the Easter distortion is reversed.
Food sales growth was unchanged from February but non-food sales growth improved. March’s unusually warm sunny weather helped clothing, footwear and outdoor leisure. Indoor homewares remained down on a year ago, with larger purchases in particular hit by consumer caution.
Online (including mail-order and phone) sales of non-food items showed stronger growth, but against a very weak March 2011. Sales were 13.9% up on a year ago, the best since December 2011.
The changing timing of Easter always makes analysis difficult in March and April. Easter fell in April 2011 but in March in 2010, meaning March last year looks exceptionally weak.
Stephen Robertson, Director General, British Retail Consortium, said: "The unusually warm weather in March brought some welcome sunshine into the lives of non-food retailers. The early signs of summer got people buying clothes and shoes for the new season. Gardening items and outdoor leisure also saw a lift.
"It’s worth remembering the sales comparison is against the weakest month of last year, largely caused by the movement of Easter in the calendar, and we’ll have to see whether this is additional spending or just shopping which has happened earlier than usual. Food sales growth continues to be largely underpinned by food inflation rather than by customers buying more.
"The overall retail environment is still difficult. Discounting remains a key tactic for retailers trying to encourage consumers to spend, particularly on big indoor items. People are still struggling to balance household budgets against expensive fuel and utilities. The warmth of March was a help but it will take more than a week of sunshine to transform retailers’ fortunes."
Helen Dickinson, Head of Retail, KPMG, said: "The clothing sector as a whole and non-food generally benefited from the warm March weather. But, as consumers’ incomes continue to be squeezed, it’s female shoppers who are tightening their purse strings most severely, focusing more on lower price point items to control the household budget. This buying behaviour saw women's clothing perform less strongly than men’s and childrenswear. Home accessories and textiles also had a poor month.
"Increases in food prices rather than volumes was one of the factors behind the uplift in this month’s figures. Rising petrol prices continued to drive up transport and manufacturing costs, causing food prices to increase each month since the start of the year. "Retailers will be hoping Easter provides a much needed boost but many are not holding their breath and continue to focus on controlling margins and costs."
Food & Drink – Joanne Denney-Finch, Chief Executive, IGD, said: "Mothering Sunday provided a mid-month boost to food and grocery sales in March. Easter now marks the start of a unique succession of events in the coming months, including the Diamond Jubilee and Olympics. The British love a reason to celebrate and our ShopperVista research shows many shoppers enjoy themed promotions and in-store activities.
"While shoppers remain sensitive to inflationary pressures, such events present great short-term opportunities. During last year’s Royal Wedding, we observed shoppers were more interested in a range of foods, including higher quality lines and organic groceries as well as locally sourced or British goods."
Online* (Non-Food) - Stephen Robertson, Director General, British Retail Consortium, said: "Online retail benefited from the warmer weather in March in much the same way as store sales, with people keen to buy clothes, footwear and garden furniture. That helped sales grow 13.9 per cent compared with the same month a year ago, the best online performance since December. "Again, March 2011 was weak because of the movement of Easter which flatters this year’s figures. Online retail continues to expand but the rate of growth is well behind the peaks of previous years. Sales are increasingly dependent on promotions and offers which are eating into margins."
*Online (including mail order and phone) sales of non-food.
- ENDS -
The BRC-KPMG Retail Sales Monitor measures changes in the actual value (including VAT*) of retail sales, excluding automotive fuel. The Monitor measures the value of spending and hence does not adjust for price or VAT changes. If prices are rising, sales volumes will increase by less than sales values. In times of price deflation, sales volumes will increase by more than sales values. Retailers report the value of their sales for the current period and the equivalent period a year ago. These figures are reported both in total and on a ‘like-for-like’ basis.
* VAT changes: from 17.5% to 15% on 1st Dec 2008; to 17.5% on 1st Jan 2010; to 20.0% on 4th Jan 2011. Total sales growth is the percentage change in the value of all sales compared to the same period a year earlier. The total sales measure is used to assess market level trends in retail sales. It is a guide to the growth of the whole retail industry, or how much consumers in total are spending in retail – retail spending represents approximately one-third of consumer spending. It is this measure that is often used by economists. Many retailers include distance sales as a component of total sales.
'Like-for-like' sales growth is the percentage change in the value of comparable sales compared to the same period a year earlier. It excludes any spending in stores that opened or closed in the intervening year, thus stripping out the effect on sales of changes in floorspace. Therefore like-for-like sales growth will always be lower than total sales growth. Many retailers include distance sales as a component of like-for-like comparable sales. The like-for-like measure is often used by retailers, the city and analysts to assess the performance of individual companies, retail sectors and the industry overall, without the distorting effect of changes in floorspace.
Online (including mail order and phone) sales of non-food are transactions which take place over the internet, or via mail order or phone. Online sales growth is the percentage change in the value of online sales compared to those in the same period a year earlier. It is a guide to the growth of sales made by this non-store channel. It should be noted that online sales are still a very small proportion of total UK retail sales. Estimates based on ONS figures show about 9 per cent of total UK retail sales (food and non-food) are achieved via the non-store channel. The responses provided by retailers within each sales category are weighted (based on ONS weightings) to reflect the contribution of each category to total retail sales, thus making it representative of UK retail sales as a whole. Because the figures compare sales this month with the comparable period last year, a seasonal adjustment is not made. However, changes in the timing of Bank Holidays and Easter can create distortions, which should be considered in the interpretation of the data.
As well as receiving sales value direct from the retailers in the scheme the BRC-KPMG Retail Sales Monitor also receives food and drink sales value data from the IGD's Market Track Scheme. In its role as sponsor of the BRC-KPMG Retail Sales Monitor, KPMG is responsible for the aggregation of the retail sales data provided by the retailers on a weekly basis. This data consists of the relevant current week’s sales data and comparative sales figures for the same period in the prior year. The aggregation has been performed by KPMG on data for periods following 2 April 2000 and equivalent prior periods. The accuracy of the data is entirely the responsibility of the retailers providing it. The sponsorship role has been performed by KPMG since 10 April 2000 and save for the aggregation of comparative sales figures for the period from 2 April 2000 it is not responsible for the aggregation of any data included in this Monitor relating to any period prior to 2 April 2000. The commentary from KPMG is intended to be of general interest to readers but is not advice or a recommendation and should not be relied upon without first taking professional advice. Anyone choosing to rely on it does so at his or her own risk. To the fullest extent permitted by law, KPMG will accept no responsibility or liability in connection with its sponsorship of the Monitor and its aggregation work to any party other than the BRC.
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The April 2012 Monitor, covering the four weeks 1 – 28 April, will be released at 00.01am Wednesday 9th May 2012.
The data is collected and collated for the BRC by KPMG.
The British Retail Consortium (BRC) is the UK's leading retail trade association. It represents the full range of retailers, large and small, multiples and independents, food and non-food, online and store based
Sponsored and Administered by KPMG LLP, a UK limited liability partnership, is a subsidiary of KPMG Europe LLP and operates from 22 offices across the UK with over 11,000 partners and staff. The UK firm recorded a turnover of £1.7 billion in the year ended September 2011. KPMG is a global network of professional firms providing Audit, Tax, and Advisory services. We operate in 152 countries and have 145,000 professionals working in member firms around the world. The independent member firms of the KPMG network are affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity. KPMG International provides no client services.
Food Data Supplied by IGD makes a difference by providing international market intelligence, supply chain best practice and consumer insight to the food and grocery industry worldwide. We work with consumers, companies and individuals across the chain to provide authoritative information, insight, thought leadership and leading edge best practice to help companies grow their business and develop their people.
This article represents the views of the author only, and does not necessarily represent the views or professional advice of KPMG in the UK.