BRC-KPMG Retail Sales Monitor July 2012 - No goldrush for retail yet

BRC-KPMG Retail Sales Monitor July 2012 - No gold...

Warm weather in the final week of the month, combined with the start of the Olympics, helped support food and drink sales. But the sharp fall in food inflation has dampened top line growth.

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UK retail sales values were up 0.1% on a like-for-like basis from July 2011, when they were up 0.6% on a year ago. On a total basis, sales were up 2.0%, against a 2.5% rise in July 2011.  

Warm weather in the final week of the month, combined with the start of the Olympics, helped support food and drink sales. But the sharp fall in food inflation has dampened top line growth.  

The three-month rolling average showed the growth of like-for-like non-food sales outpacing food sales for the first time since May 2010, driven by strong growth in clothing and footwear and toiletries and cosmetics.  

Discretionary and big-ticket items continued to struggle with sales growth promotion-driven.   Online (including mail-order and phone) sales of non-food items showed stronger growth, up 15.6% against growth of 9.6% last year. This marks the strongest growth this year.  

Stephen Robertson, Director General, British Retail Consortium, said: "July was clearly not a golden month for retail. Like-for-like sales were virtually flat compared with a year ago and total growth of two per cent was still behind inflation as consumers, dealing with squeezed budgets, prioritised their spending on essentials.  

"After the June wash-out, more wet weather in July continued to stifle demand for outdoor gear. There was a boost for food retailers towards the end of the month as the sunshine came out and shoppers started getting in party food and drink ahead of the Olympics but it wasn‟t a significant help.  

"The brightest spot was clothing and footwear thanks to cooler weather coinciding with autumn ranges reaching the shops. Consumers responded enthusiastically to the chance to refresh their wardrobes with items they could make use of straightaway. Some retailers also benefitted from the longer Sunday opening hours brought in for the Olympic period.  

"With only the opening couple of days of the Olympic Games covered by these statistics we‟ll have to wait a while to assess the overall impact on retail sales. Let‟s hope Team GB keeps on increasing its medal tally, bringing a feelgood factor that helps consumer confidence."  

Helen Dickinson, Head of Retail, KPMG, said: "Sadly July was a lacklustre month and it‟s doubtful this trend will change as early expectations that the Olympics will raise retailers' fortunes look to be wide of the mark. Central London's retailers are already being hit hard by shoppers actively avoiding the capital. It‟s likely that any blip of benefit the games bring will be short lived.  

"Sales of women's and children's footwear were the only highlight as families grappled with the ongoing effects of unseasonal weather. The lack of any feelgood factor encouraging consumers out into the shops has provided a set of figures much more indicative of the true underlying trend. These show weakness in sentiment as disposable incomes remain squeezed, despite the fall in headline inflation. It‟s a real challenge for retailers to grow sales and many are only achieving this at the expense of margins."  

Food & Drink – Joanne Denney-Finch, Chief Executive, IGD, said: "The see-saw summer continued in July, with persistent rain in the first half of the month and sunshine emerging in the last two weeks. The warmer weather, extended Sunday opening and the run-up to the Olympics, helped boost food and grocery sales – which peaked in the final week.   "With the nation now captivated by the Olympics, British food could benefit from the patriotic spirit. Nearly half of shoppers (45%) tell us supporting British or local producers is an important factor when choosing what food they buy."   Online* (Non-Food) - Stephen Robertson, Director General, British Retail Consortium, said: "Online retailers have enjoyed their biggest boost since Christmas. July 2011 did give us a relatively weak comparison but an increase of 15.6 per cent is strong nonetheless. A combination of the miserable weather and the arrival of new season clothing ranges have led to more people shopping from home.  

"Much of the online sales growth has been dependent on eye-catching promotions as competing retailers cut into their margins to attract business. There‟s also evidence of click-and-collect services growing in popularity as shoppers become more confident about using the full range of shopping options available to them thanks to new technology."  






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. 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 the same 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 August 2012 Monitor, covering the four weeks 29 July – 25 August, will be released at 00.01am Tuesday 4 September 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.

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