Covering the four weeks 29 April – 26 May 2018
- In May, UK retail sales increased by 2.8% on a like-for-like basis from May 2017, when they had decreased 0.4% from the preceding year.
- On a total basis, sales increased 4.1% in May, against an increase of 0.2% in May 2017. This is above the 3 month and 12-month averages of 1.2% and 1.5% respectively and the highest increase since January 2014, when not including Easter distortions.
- Over the three months to May, In-store sales of Non-Food items declined 3.0% on a Total basis and 4.1% on a Like-for-like basis. On a 12-month basis, the Total decline was 0.2%. However, on a monthly basis, it was the best performance since January 2016, excluding Easter distortions.
- Over the three months to May, Food sales increased 2.0% on a like-for-like basis and 3.4% on a total basis. This is below the 12-month Total average growth of 3.6%, further evidence that growth has peaked, since inflation started to recede. On a monthly basis, this was the best performance since July 2013, excluding Easter distortions.
- Over the three-months to May, Non-Food retail sales in the UK decreased 1.4% on a like-for-like basis and 0.5% on a Total basis. This is below the 12-month Total average decrease of 0.2%. On a monthly basis, this was the best performance since January 2016, excluding Easter distortions.
- Online sales of Non-Food products grew 11.9% in May, against an easy comparable growth of 4.3% in May 2017. This is above the 3-month and 12-month averages of 8.8% and 8.1% respectively. Online penetration rate increased from 21.3% in May 2017 to 22.4% in May 2018.
Paul Martin, UK Head of Retail, KPMG
“May provided a much needed uplift to retail performance delivering a respectable 4.1 per cent growth. Two bank holiday weekends, a Royal wedding and of course sunnier spells will have been the main drivers behind the apparent rebound, with both online and high street sales thankfully up overall.
“Grocery sales once again continued to be strong, boosted by added enthusiasm for picnics and barbeques. Elsewhere, appetite for non-food categories, including fashion, also experienced a welcome uplift. That said, the picture was less favourable in the larger discretionary categories such as home improvement and furniture.
“While the month’s figures may paint a rosier picture, there is no room for complacency. The market is increasingly being split into winners and losers, with a number of legacy players continuing to face extremely challenging conditions. As such, focusing on transforming businesses both operationally and financially is pivotal.”
Helen Dickinson OBE, Chief Executive, British Retail Consortium
"Retail sales in May saw their highest growth since January 2014 as better weather and the bank holiday effect led shoppers to buy from garden furniture and summer fashion ranges; recovering some of the ground lost in April. Food sales also stood out with the best single month's performance since July 2013. Encouragingly, growth was seen across channels as stores made a comeback with their best showing in 16 months.
"The FA Cup Final and Royal Wedding may have got the nation in the mood for celebration but the day itself was a distraction for shoppers as they stayed at home to watch the festivities; sales also tailed off once the party was over.
"Despite this more positive set of sales results, the retail environment remains extremely challenging, with trend growth still very low by historical standards. Retailers remain focused on investing in new and exciting shopping experiences for the future as margins remain tight and the competition fierce."
Food & Drink sector performance | Joanne Denney-Finch, Chief Executive, IGD
“Warm dry weather in May combined with the Royal Wedding provided excellent conditions for food and grocery sales; especially beers, wines and spirits.
“The World Cup in June could prolong this run, and if we are really lucky, into July. There has also been a moderate rise in shopper confidence. 26 per cent expect to be better off in the year ahead up from 23 per cent in April and 22 per cent this time last year.”
Notes to editors:
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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.
About KPMG in the UK
KPMG LLP, a UK limited liability partnership, operates from 22 offices across the UK with approximately 14,500 partners and staff. The UK firm recorded a revenue of £2.2 billion in the year ended 30 September 2017. KPMG is a global network of professional firms providing Audit, Tax, and Advisory services. It operates in 154 countries and territories and has 200,000 people 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.