BRC – KPMG online retail sales monitor February 2017

BRC – KPMG online retail sales monitor February 2017

Online growth rate unchanged in February

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Covering the four weeks 29 January – 25 February 2017

Online sales of Non-Food products in the UK grew 8.0% in February versus a year earlier, when they had increased by 10.7%. This is above the 3-month average of 7.7% and the 12-month average of 9.3%. This is the second month in a row the 12-month average has sat below double-digit figures.

Over the 3 months to February, Online sales of Non-Food products in the UK grew 7.7% year-on-year, the lowest 3-month average since our monitor began. Over the same period, Total Non-Food sales in the UK fell by 0.2%, the first decline since November 2011.

In February 2017, Online sales represented 22.2% of total Non-Food sales in the UK, against 21.0% in February 2016. On a 3-month basis, penetration rate was 23.2%.

Over the 3 months to February, Online sales contributed 2.3 percentage points to the year-on-year growth of Total Non-Food sales. In contrast, In-Store sales made a negative 3-month contribution of 2.5 percentage points. In February, Online sales contributed 1.8 percentage points to Non-Food growth.
Over the 3 months to February, In-Store sales fell, posting declines of 2.4% on a total basis and 2.6% on a like-for-like basis. For the month of February, In-Store sales showed a decline. 

Helen Dickinson OBE, Chief Executive, British Retail Consortium

“A fairly stable rate of online growth has again helped compensate for declines in stores. The online market has now grown to over 20 per cent of total non-food sales, and as a result growth of 8.0 per cent is understandable if not as impressive in previous years and helps explain the lowest 3-month average rate of year-on-year growth since May 2013.  

“Digital platforms remain the preference for a savvy shopper to search for the items they want at the best price, and helps explain why clothing and electronics have driven online growth when sales in stores have flagged. A later Mother’s Day this year has distorted the figures for February, since purchases which were made in the final week of February last year will now fall in March’s figures this year. We expect March’s growth to be stronger due to the impact of this distortion and of new video game releases.”  

Paul Martin, UK Head of Retail, KPMG

“Online retail sales in February provide further contrast to the poor performance noted on the high street. Non-food online sales are up 8% on last year and penetration rates remain stable at 22.2%. 

“Interestingly, many of the categories that failed to capture the attention of shoppers in store, did so online – including clothing and footwear. Carefully placed promotions and the shorter wait until pay day in February are likely to have nudged online shoppers to e-checkouts.  

“School half-term will also have contributed to online retailer’s stronger performance and notably children’s toys performed particularly well during the month.  

“In the run up to the Budget, online retailers will be eager to learn if the Chancellor looks to support the retail sector. The business rate rise has been hotly contested, given the varying impact the proposed changes will have on retailers utilising physical or online retail channels.”  

-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 weightings derived from the ONS Family Spending survey) 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 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.  

For media enquiries:

Zoe Maddison
Media Relations Officer, BRC

T: +44 (0)20 7854 8924
E: Zoe.maddison@brc.org.uk

Simon Wilson, KPMG
T: 0207 311 6651
M: 0778 537 3397
E: Simon.wilson@kpmg.co.uk

Laura Roberts 
Head of Corporate Communications, IGD

T: 01923 857141
M: 07811 930971
E: Laura.Roberts@IGD.com

The data is collected and collated for the BRC by KPMG.

BRC

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

KPMG LLP, a UK limited liability partnership, operates from 22 offices across the UK with approximately 13,500 partners and staff.  The UK firm recorded a revenue of £2.07 billion in the year ended 30 September 2016. KPMG is a global network of professional firms providing Audit, Tax, and Advisory services. It operates in 152 countries and has 189,000 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,

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business and develop their people.

Detailed weekly data by category is available to retailers who contribute to
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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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