Helen Dickinson, Director General, British Retail Consortium, said: "The good news is that overall retail sales continued to grow although not as fast as this time last year. Retailers have thought creatively about marketing solutions to incentivise sales of winter merchandise during the warmer weather. For example the use of analytics has enabled loyal customers to be offered targeted flash reductions with sale items being made available both in store and online.
"Consumers are still prioritising household items such as furniture over fashion, with furniture outperforming all other categories for a second month in a row. Retailers preparation around stocking items required for Halloween celebrations such as costumes of characters from animation feature films for children, meant a significant year on year increase in Halloween related sales. The impact was also felt with an improved three month average in sales of food although not enough to stem the trend felt over the last six months. It remains to be seen whether the Christmas period will start to provide better fortunes for food, however there are positive signs that beauty and homeware items traditionally popular for gifting are selling increasingly well in the build-up to the festive period."
David McCorquodale, Head of Retail, KPMG, said: "Looking at these figures, most retailers will feel they were tricked rather than treated in October. Even the most experienced of shopkeepers could not have foreseen a heat wave at Halloween and most were left with sales which were flat at best.
"Sadly, this warmer weather has left many fashion retailers with a substantial stock overhang, raising the question of earlier and deeper discounts as we get closer to Christmas. Retailers need a nippy November to help them sell their winter stock before the season's out.
"Promotions remained rife in the grocery sector, leaving it with the unenviable moniker of the worst performing sector. The silver lining for the sector is that the 3 month average like-for-likes, whilst still negative, were not as bad as in September which will be welcome relief in the midst of negative news.
"With Christmas in their sights, retailers are launching their highly anticipated festive campaigns to connect with and inspire consumers to shop with them this year. All channels will be tested to the full over the coming weeks with a careful eye monitoring the margins."
Food & Drink sector performance – Joanne Denney-Finch, Chief Executive, IGD, said: "While there was a boost to food and drink sales in Halloween week it wasn’t much more than in previous years, so overall, another disappointing month.
"Recently reported falling prices are impacting on retail sales but they do help people to feel better-off. Our latest ShopperVista research found that the number of shoppers anticipating a decline in their finances has halved: with 30% expecting to be worse off in the year ahead, compared to 61% who said this in January 2011.
"Much now depends on whether this improving shopper sentiment converts to strong Christmas sales."
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Notes to Editors:
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.
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 (LFL) 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 these non-store channels. It should be noted that online sales are still a small proportion of total UK retail sales. Estimates based on ONS figures show about 10 per cent of total UK retail sales (food and non-food) are achieved via the internet.
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 aggregation of data for the weighted ‘online’ figures has been performed by the BRC and KPMG for periods starting 25 November 2012 and equivalent prior year periods. Prior to that date, the online figures in this monitor refer to the unweighted non-food non store indicator, as published in the BRC-KPMG Retail Sales Monitor until July 2013.
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.
© Copyright British Retail Consortium and KPMG (2014). The contents of this report and those of all ancillary documents and preparatory materials are the sole property of BRC and KPMG and are not to be copied, modified, published, distributed or commercially exploited other than with the express permission of BRC or for the purposes of journalistic comment and review. All rights reserved.
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The November 2014 Monitor, covering the four weeks 2 November – 29 November, will be released at 00.01am Tuesday 9 December 2014.
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.
KPMG LLP, a UK limited liability partnership, operates from 22 offices across the UK with approximately 11,500 partners and staff. The UK firm recorded a turnover of £1.8 billion in the year ended September 2013. KPMG is a global network of professional firms providing Audit, Tax, and Advisory services. It operates in 155 countries and has 155,000 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. Each KPMG firm is a legally distinct and separate entity and describes itself as such.
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This article represents the views of the author only, and does not necessarily represent the views or professional advice of KPMG in the UK.