BRC – KPMG retails sales monitor February 2017

BRC – KPMG retails sales monitor February 2017

First non-food quarterly decline since November 2011

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Covering the four weeks 29 January – 25 February 2017

  • In February, UK retail sales decreased by 0.4% on a like-for-like basis from February 2016, when they had increased 0.1% from the preceding year.
  • On a total basis, sales rose 0.4% in February, against a 1.1% increase in February 2016. This remains below the 3-month average of 0.8% and the 12-month average of 0.9%.
  • Over the three-months to February, Food sales increased 0.6% on a like-for-like basis and 2.0% on a total basis. This is the third consecutive 3-month average Total growth of 2.0% or above, taking the 12-month Total average growth to 1.2%, the highest since May 2014.
  • Over the three-months to February, Non-Food retail sales in the UK declined 0.4% on a like-for-like basis and 0.2% on a total basis. This is the first 3-month decline since November 2011, dragging the 12-month Total average growth to 0.6%, the lowest since May 2012.
  • Over the three-months to February, Online sales of Non-Food products grew 7.7% while In-store sales declined 2.4% on a Total basis and 2.6% on a like-for-like basis.

Helen Dickinson OBE, Chief Executive, British Retail Consortium

“Overall growth was subdued in February driven by a continuation of the slowdown in non-food sales. This was marginally offset by slightly stronger growth in food sales.

“There was some negative distortion created by the later timing of Mother’s Day this year, which meant that some categories, notably women’s accessories and health and beauty, didn’t benefit from the build-up of gift purchases as they did last year. But looking beyond this distortion, the persistent weak sales performance of several non-food categories points to an undeniable trend of cautious spending on non- essential items.

“Tougher times are expected ahead. The impact of inflation on consumer spending will add further intensity to an already fiercely competitive environment in which the ability to adapt and innovate will be key to survival. Looking to the Budget this week, we hope to see a commitment from Government to lay a path to a truly sustainable business rates system that will give retailers the flexibility needed to invest and support their local communities.”

Paul Martin, UK Head of Retail, KPMG

“Evidently February was yet another challenging month for the majority of retailers, with like-for-like sales down 0.4 per cent on last year. Food sales however, continued to buck the general trend by remaining in the black. That said, with inflation starting to have an impact on retail performance, it is clear that consumer confidence is showing signs of deteriorating.

“School half-term holidays are likely to have contributed to the stronger performance in children’s toy sales during the month. Likewise, furniture and home textile sales will have benefited from parents using the holiday as an opportunity to spruce up the home.

“Retailers will be paying close attention to the upcoming Spring Budget in the hope of seeing some measures to ease the pressure being placed on margins. For some bricks and mortar retailers, a hike in business rates may well be the straw that breaks the camel’s back.”

Joanne Denney-Finch, Chief Executive, IGD

“Food and grocery turned in a solid sales performance throughout February, with a particularly strong Valentine’s Day this year.

“The return of a little inflation to the aisles is also playing its part and shoppers are bracing themselves for more to come: 81 per cent believe food prices will rise in the coming year, the highest level of anticipation since September 2016. This puts the emphasis back on hunting for value, with 63 per cent of shoppers favouring everyday low prices over more special offers.”

- 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, 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: 0207 854 8960
E: anne.alexandre@brc.org.uk

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