Helen Dickinson, Director General, British Retail Consortium, said: “After the bustle of Christmas and the excitement of the January sales, February is usually a quiet month for retailers. So it’s heartening to see that retail sales continued to rise this month by close to 2 per cent.
“What’s interesting is that almost all categories of product saw increased sales – so the good news is shared out pretty evenly across the industry as a whole. There was some specific excitement around swimwear, sandals and other ‘holiday’ items as consumers turned their mind to their getaways. Valentine’s Day also drove good sales of beauty products, jewellery and food related gifts.
“Fundamentally though, sales are up while prices fall which means that retailers are continuing to work hard to provide original products that excite customers at the right price. So far, 2015 has been positive for both retailers and consumers and it shows no signs yet of changing course.”
David McCorquodale, Head of Retail, KPMG, said: “Activity on the high street has settled into a monotonous equilibrium, with falling like-for-like food sales persistently wiping out any meaningful like-for-like growth the non-food sector manages to achieve. February’s figures are also against very weak comparables, when bad weather caused sales to stall last year.
“Whilst the 0.5 per cent growth in quarterly food sales is the highest since January 2014, it seems that overall the wider economic recovery is bypassing the retail sector. With interest rates and inflation remaining low, it’s surprising more consumers aren’t treating themselves to a new pair of shoes, or curtains for the home. One suspects that restaurateurs, not retailers, are benefitting from the extra cash in consumers’ pockets resulting from fuel price savings. “However, some sectors did see sales growth. Sales of furniture and household appliances rose, no doubt helped by the recovery in the housing market; clothing also received a boost, aided by the arrival of new collections in store.
“The fall off in the three-month average in non-food sales is a result of last year’s Black Friday dropping out. Retailers will be hoping that the arrival of spring can drive a more sustained upswing in spending as warmer temperatures encourage shoppers to splurge on new season outfits.”
Food & Drink sector performance – Joanne Denney-Finch, Chief Executive, IGD, said: “With energy and ingredient cost reductions continuing to work their way through the supply chain, food retailers have been buying and selling at lower prices.
“So although February’s food and drink sales figures were almost identical to last year’s, it means shoppers are investing their savings back into better quality groceries – helping to boost volumes. Our ShopperVista research shows 31 per cent of shoppers now say product quality is extremely important when deciding where to buy their groceries, compared to 27 per cent who said the same last year.”
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.
The March 2015 Monitor, covering the five weeks 1 March – 4 April, will be released at 00.01am Tuesday 14 April 2015.
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.
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