In April, UK retail sales increased by 5.6% on a like-for-like basis from April 2016, when they had decreased 0.9% from the preceding year.
Covering the four weeks 2 - 29 April 2017
Helen Dickinson OBE, Chief Executive, British Retail Consortium
“As expected, the Easter holidays provided the welcome boost to retail sales, which goes some way to making up for the disappointing start to the year. That said, the positive distortion from the timing of Easter was largely responsible for the month’s growth and looking to the longer-term signs of a slowdown, the outlook isn’t as rosy.
“Taking a closer look at the sales figures, consumer spend on food and non-food items is diverging. Food categories continue to contribute the most weight to overall growth, although food inflation has a part to play in this. Meanwhile, consumers are being more cautious in their spending towards non-food products and focussing more on value priced lines.
“Shop prices are still down overall although other items of consumer spending are increasing headline inflation and hence driving a tightening of purse strings. Although today’s figures do indicate that consumers are still willing to spend, with a cocktail of rising costs and slowing wage growth as the backdrop, conditions for consumers will get tougher. The next Government needs to deliver a plan that puts consumers first in its economic policies and the forthcoming Brexit negotiations.”
Paul Martin, UK Head of Retail, KPMG
“April’s sales provided a brief period of respite for retailers following a relentless start to the year. However, much of the rise was driven by the timing of Easter and the growing inflationary pressures the sector is facing, rather than a sudden upswing in consumer confidence.
“Food and drink sales soared significantly in April, suggesting that feasts remain at the heart of festive holidays. That said, in the ultra-competitive grocery sector, these growth figures should be taken with a hefty pinch of salt, with margins under significant pressure and profitability remaining a concern.
“The growth in sales of children’s clothes and toys points to parents making the most of school holidays and keeping the kids entertained. Meanwhile, the rise in furniture sales suggests that springtime home improvements have been kicked into gear.
“Looking ahead, retailers need to ensure that this month’s boost doesn’t lull them into a false sense of security. The retail landscape is changing fast and as such, agility and the ability to manage costs will remain critical.”
Joanne Denney-Finch, Chief Executive, IGD
“April’s food and grocery sales are best viewed in combination with March to iron out the changing date of Easter. Sales across this two-month period were up by around 4 per cent on last year, exceptional growth by all recent standards. Partly, this is due to the return of some food inflation but the underlying demand for groceries was also very robust.
“The public remains in a state of uncertainty though and we cannot be sure how long the good run will last. The number of shoppers expecting to be better off in the year ahead has dipped to 21 per cent from 24 per cent last month.”
- 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.
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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.
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