Helen Dickinson, Director General, British Retail Consortium, said: "April witnessed a solid performance for fashion and beauty retailers; particularly welcome following a disappointing Autumn/Winter season. While the early Easter this year heavily distorted April’s figures, across all categories, we see the best three month average year-on-year growth since June of last year; a clear indication that confidence among consumers is slowly improving and that despite profitability being under intense pressure due to changes in shopping habits and promotional activity, retail remains a robust pillar of the economy.
"Among the non-food categories, the only ones which saw a dip were in homewares, which was to be expected due to the timing of Easter. Consumer spending on food over the past three months also increased, with sales rising by 0.4 per cent compared to the same period last year. This is reasonably encouraging when we consider the structural changes and very competitive market in which grocery retailers find themselves operating."
David McCorquodale, Head of Retail, KPMG, said: "With an early Easter pulling sales forward into March, top-line trends for April inevitably look pretty weak. However, taking the three months to April to eliminate seasonality, this is a bit of an April fool, as retail sales have continued their steady rise through the year and increased by 1.9%. In particular, the sunniest April since records began gave a boost to fashion sales, driving demand for spring/summer clothing and footwear with consumers also taking advantage of Easter sales to bag a bargain.
"Food sales for the quarter grew by less than half a per cent but this is still positive compared to the declines felt through most of 2014. Like for like grocery sales continue to decline but the long road to recovery appears to be taking some direction.
"Looking ahead, the birth of Princess Charlotte together with the promise of more warm weather on the horizon will boost consumers’ feel good factor and encourage spending as we head into the summer months. Added to this, with David Cameron firmly in place at No. 10, retailers will be looking to ensure he fulfils his promise not to increase VAT and also to review business rates. It is also hoped that a stable government can allow consumer confidence to flourish"
Food & Drink sector performance – Joanne Denney-Finch, Chief Executive, IGD, said: "With the timing of Easter changing every year, it helps to combine the food and drink sales figures for March and April to see the underlying trend. This shows a modest increase, which is reasonably encouraging given the recent fall in grocery prices.
"In the run-up to the election, shopper sentiment has been in the balance. Those believing they’ll become worse-off over the next year increased slightly to 27 per cent, contrary to the recent trend. Meanwhile, the number of shoppers saying quality is the most important factor when grocery shopping reached a record 41 per cent. The election outcome should give shoppers more certainty, which will probably tilt the balance positively."
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 May 2015 Monitor, covering the four weeks 3 May – 30 May, will be released at 00.01am Tuesday 9 June 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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KPMG LLP, a UK limited liability partnership, operates from 22 offices across the UK with approximately 12,000 partners and staff. The UK firm recorded a turnover of £1.9 billion in the year ended September 2014. KPMG is a global network of professional firms providing Audit, Tax, and Advisory services. It operates in 155 countries and has 162,000 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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