BRC – KPMG retail sales monitor May 2017

BRC – KPMG retail sales monitor May 2017

In May, UK retail sales decreased by 0.4% on a like-for-like basis from May 2016.

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  • In May, UK retail sales decreased by 0.4% on a like-for-like basis from May 2016, when they had increased 0.5% from the preceding year.
  • On a total basis, sales rose 0.2% in May, against a growth of 1.4% in May 2016. This is the lowest since January, excluding Easter distortions, and below the 3-month and 12-month averages of 1.9% and 1.2% respectively.
  • Over the three months to May, Food sales increased 3.2% on a like-for-like basis and 4.3% on a total basis. This is the strongest 3-month average since February 2012, excluding Easter distortions. This pulls the 12-month Total average growth to 2.2%, the highest since January 2014.
  • Over the three-months to May, Non-Food retail sales in the UK decreased 0.3% on a like-for-like basis and increased 0.1% on a total basis, below the 12-month Total average growth to 0.5%. May’s Total Non-Food performance was the worst recorded since May 2011.
  • Over the three-months to May, Online sales of Non-Food products grew 7.0% while In-store sale declined 1.8% on a Total basis and 2.3% on a like-for-like basis, below the like-for-like 12-month average decline of 2.0%.


Helen Dickinson OBE, Chief Executive | British Retail Consortium said:

“After the pick-up in sales over Easter, consumer spending slowed again in May resulting in almost flat growth on the previous year. Underneath the headlines, there’s continued variation in the performance of food versus non-food products, as sales performance of the two become increasingly polarised. Food sales, albeit positively distorted by inflation, continue to see annual growth, while in non-food categories which are predominantly capturing discretionary spending, retailers find themselves having to compete even harder.

“Overall, May’s sales slowdown is indicative of a longer term trend of a decline in consumer spending power. As household budgets become increasingly squeezed by inflation, predominantly in the non-retail part of the consumer basket, it’s vital that the next Government helps retailers keep prices low for ordinary shoppers. This means, as well as securing a tariff-free trade deal with the EU, negotiating frictionless customs arrangements; providing certainty for EU colleagues working in the UK; and ensuring the continuity of existing EU legislation as it transfers into UK law.”

Paul Martin, UK Head of Retail | KPMG said:

“After the surge in retail sales last month – the by-product of this year’s relatively late Easter – retailers have been brought back down to earth with a thump. Like-for-like retail sales contracted in May, which is likely to represent a more accurate depiction of the state of UK retail currently.

“The impact of inflationary pressures on the nation’s purse continues to play out in this month’s figures, with shoppers evidently spending more on food and drink than on non-food purchases. With inflation continuing to rise and wage growth stagnating, consumers are starting to feel the pinch – although the highly competitive nature of the UK grocery market continues to play out in the consumer’s favour.  

“Many retailers, particularly fashion stores, will be poised and ready to make the most of the upcoming summer, so hopefully the weather will play fair. An increased focus on managing costs will dominate the retail agenda. More imminently though, eyes will be firmly placed on the outcome of the General Election, with close attention being paid to the implications it might have on the industry.”

Food & Drink sector performance | Joanne Denney-Finch, Chief Executive | IGD said:

“Food and drink sales were again strong in May, not quite reaching the heights of average growth from the previous two months, but maintaining the trend for year-on-year growth. This was mainly attributable to inflation combined with warm weather in the run-up mto the late May bank holiday. The sustained sunshine saw beers, wines and spirits enjoy double-digit growth.

“With no big summer event beyond the regular schedule this year, sales over the next few months will hinge largely on the weather. Hot conditions encourage impulse buying. For instance, over a third (34 per cent) of shoppers say they tend to revert at the last minute to a barbecue when the weather is good.”

 

-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
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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
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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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