BRC - KPMG Online Retail Sales Monitor July 2016 - Online steals the show in solid summer sales

Online steals the show in solid summer sales

"Online (non-food) sales echoed the performance of total sales this month, with growth rising back to the 12 month average."

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Helen Dickinson OBE, Chief Executive | British Retail Consortium

"The brief drop-off in online sales activity in the few days following the referendum turned out to be a blip as consumers, who had turned their attentions to browsing for details about the EU, quickly returned to spending online.

"As with instore sales, there was widespread promotional activity in July. That is usual for this time of year, although a number of retailers undertook longer and broader promotions as a result of the substantial accumulated stock resulting from a sluggish first half of 2016. We’ll have to watch and wait to see if the success of promotions spills over on to full price sales.

"Whilst there doesn’t appear to be much sign of the reported fall in consumer confidence feeding into sales, with the rapid and multi-faceted evolution of internet centred technology, customers are becoming increasingly savvy and expectant of low prices. Given the fierce competition in the market, retailers have little choice but to rise to the challenge."

 

David McCorquodale, Head of Retail | KPMG

“E-tills were ringing this July with overall non-food online sales up 11.2 per cent in the month. Women’s fashion and accessories performed positively compared to the slump in June as the July heatwave coupled with seasonal sales spurred summery purchases.

“Elsewhere, families took advantage of timely e-promotions boosting sales of outdoor toys so that the kids could make the most of the July heatwave. Sales of household appliances and furniture also surged as consumers purchased outdoor tables, chairs and barbecues to maximize the alfresco dining experience.

“Despite this, penetration rates dipped slightly by 0.2 percentage point as more shoppers hit the high-street in the warmer weather. While online remains a key shopping avenue, retailers need to continue to ensure consistency of experience across all channels in order to maintain the attraction of both the virtual and physical aisles to their consumers.”

Notes

The Online BRC-KPMG Retail Sales Monitor measures changes in the actual value (including VAT) of online 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 online sales for the current period and the equivalent period a year ago.

Total Non-Food sales growth is the percentage change in the value of all retail sales with the exception of food sales compared to the same period a year earlier. The total Non-Food sales measure is used to assess market level trends in Non-Food retail sales. Non-Food retail spending represents approximately 55% of total retail sales.

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 all non-store channels.

Penetration is the proportion of sales attributed to the online channel (including mail order and phone). Penetrations are calculated category by category as online sales submitted by participating retailers relative to total sales those retailers submit to the BRC-KPMG Retail Sales Monitor. Participants who do not sell online (or through non-store channels) are included but participants who do sell online but do not submit their online sales are excluded.

The responses provided by retailers within each sales category are weighted* to reflect the contribution of each category to total retail sales, thus making it representative of UK retail sales as a whole. The rates used are derived from the Office of National Statistics Family Spending Survey and revised every year. 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.

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 the BRC 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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Zoe Maddison

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KPMG

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Jessica Liebmann

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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 12,000 partners and staff. The UK firm recorded a revenue of £1.96 billion in the year ended September 2015. KPMG is a global network of professional firms providing Audit, Tax, and Advisory services. It operates in 155 countries and has 174,000 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.

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: 0207 854 8960

E: anne.alexandre@brc.org.uk

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