BRC-KPMG Retail Sales Monitor July 2015 - Strong underlying momentum boost for home categories

BRC-KPMG Retail Sales Monitor July 2015

UK retail sales increased 1.2% on a like-for-like basis from July 2014, when they had decreased 0.3% on the preceding year.

Also on KPMG.com

  • UK retail sales increased 1.2% on a like-for-like basis from July 2014, when they had decreased 0.3% on the preceding year. On a total basis, sales were up 2.2%, against a 1.3% rise in July 2014. Adjusted for the BRC-Nielsen Shop Price Index deflation, total growth was 3.6%.
  • Total Food sales fell for the first time this year, excluding Easter distortions. In the three months to July, total Food sales were up 0.1%. Non-Food sales grew 3.7% over the same period, showing strong underlying momentum for Non-Food.
  • Furniture, Home Accessories and House Textiles formed three of the top four performing categories, supported by a robust housing market.
  • Online sales of Non-Food products in the UK grew 14.7% in July versus a year earlier, when they had grown 14.9%. The Non-Food online penetration rate was 17.6%, up from 16.5% in July 2014.

Helen Dickinson, Director General, British Retail Consortium, said: "Despite being a slight slowdown compared with last month, today’s sales growth of 2.2 per cent compared with this time last year reflects the continued hard work by retailers to tap into increasing consumer demand. Interestingly, of all categories covered by our monitor, total food sales were the worst performing, recording a fall for the first time this year.

"However, as the labour market continues to improve and real wages show strong growth it’s no surprise our extra disposable income seems to be being spent on more discretionary purchases. Three of the four best performing categories in the monitor were furniture, house textiles and home accessories benefitting from renewed strength in the housing market.

"Retailers have been offering great prices and special offers on everyday essentials for some time. Despite 27 consecutive months of falling shop prices it seems that consumers remain content to budget carefully on their necessary food outlay and spend that little bit more on purchases they have perhaps deferred."

David McCorquodale, Head of Retail, KPMG, said: "Retail sales remained positive in July as improved consumer confidence is slowly winding its way to the tills. Grocers continue to feel the heat with like-for-like sales down 1.6 per cent in the last three months, but this is an improvement from the doldrums of last year.

"Heading into the start of school summer holidays, sales of children’s footwear and fashion were given a boost as families kitted out the kids ready for the beach. And while women’s fashion had a surprisingly weaker month in July, sales of accessories soared as ladies looked to update existing wardrobe staples with new bags and shoes.

"Elsewhere, with the housing market up on last year, consumers took advantage of end of season sales to deck out new abodes with the latest homeware and furniture.

"Looking ahead, retailers will be hoping more summer sunshine coupled with confirmation that interest rates will stay at 0.5 per cent, will keep consumer confidence riding high into August."

Food & Drink sector performance – Joanne Denney-Finch, Chief Executive, IGD, said: "Food and drink sales are particularly influenced by the weather at this time of year. July began with a heatwave and strong food sales but the rest of the month was colder and wetter than average and July’s overall performance disappointed after a run of more encouraging months.

"The latest BRC-Nielsen Index showed a slight return to food inflation, and IGD’s ShopperVista data shows the number of shoppers anticipating falling food prices has dropped from 23% in January to 13% today. However, further oil price falls and forecasts for strong global harvests will put more downward pressure on food prices which is good news for shoppers but will constrain sales."

 

- ENDS - 

 

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.

 

For media enquiries, please contact:

British Retail Consortium

21 Dartmouth Street

London, SW1H 9BP

www.brc.org.uk

T: +44 (0)207 854 8924

E: media@brc.org.uk

 

KPMG

15 Canada Square

London, E14 5GL

www.kpmg.co.uk

Jess Liebmann, KPMG Corporate Communications

T: +44 (0)207 311 3245

M: +44 (0)7551 135 778

E: jessica.liebmann@kpmg.co.uk

KPMG Press office: +44 (0)207 694 8773

Follow us on twitter: @kpmguk

 

The August 2015 Monitor, covering the four weeks 2 August – 29 August, will be released at 00.01am Tuesday 8 September 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.

Sponsored and Administered by

About KPMG

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.

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.

Detailed weekly data by category is available to retailers who contribute to the monitor. If you would like to participate in the Retail Sales Monitor, please contact:

Anne Alexandre

T: +44 (0)207 854 8960

E: anne.alexandre@brc.org.uk

This article represents the views of the author only, and does not necessarily represent the views or professional advice of KPMG in the UK.

Connect with us

 

Request for proposal

 

Submit

KPMG’s new-look website

KPMG’s new-look website