Helen Dickinson, Director General, British Retail Consortium, said: “Retail sales growth for the twelve months to April showed a healthy increase of 2.8 per cent compared to the twelve months to April 2013. There are now clear signs that the retail economy is expanding as retailers offer great new products and competitive prices to consumers who are still watching their spending very closely.
“As anticipated, the Easter break introduced a positive distortion into the April 2014 comparable figures (as the holiday fell in March in 2013) and so April sales were up by 5.7 per cent. However what we can say for certain, is that customers responded well to great deals and good ranges in children’s clothes, DIY products and furniture, although volumes of food sales did not rise significantly. As the Online Retail Sales Monitor shows, customers took advantage of the holidays to visit and buy their products in stores, which is a useful reminder that people still very much enjoy the great experience of shopping in store as well as online.”
David McCorquodale, Head of Retail, KPMG, said: “Strong April sales figures may have benefitted from Easter falling late this year but it is clear that the effects of the wider economic recovery are feeding through to the retail sector, as evidenced by the 3.3 per cent rise in non-food sales in the last quarter. The clothing and footwear segments performed well over the Spring months, benefitting from milder weather than last year.
“The renewed confidence in the housing market inspired homeowners to invest in their property once again during April. Sales of furniture and flooring increased over the Easter break as consumers not only had the confidence to refresh their décor, but also to invest in big ticket items.
“The food sector remained competitive with grocers slashing prices to attract customers. The last three months’ figures, which eliminate the distortion of Easter’s timing, reveal that total food sales have been flat at best. Price wars may be good news for the consumers but mean that grocers have to urgently re-think business models to maintain margins.
“After splashing out at Easter shoppers may be more restrained in the forthcoming months as they keep a keen eye on cash. However, if we have fine weather and the good economic news keeps coming, this should give retailers the momentum they need to drive sales of summer stock.”
Food & Drink sector performance – Joanne Denney-Finch, Chief Executive, IGD, said: “Although shoppers continue to grow more optimistic, food retailing still isn’t reaping the benefit. This is partly because people are eating out more and also because shoppers are catching up on non-food purchases such as cars, clothes and furniture.
“However, some parts of food retail are enjoying strong growth including discounting, convenience and online. 95 per cent of food shoppers now regularly spread their spend across more than one channel and a third use five or more channels (hypermarket, supermarket, convenience, food discounter, fixed price discounter, online, frozen food store, specialist store or farm shop).”
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 ONS weightings) 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 aggregation of data for the weighted ‘online’ figures has been performed by the BRC and KPMG for periods starting 25 November 2012 and equivalent prior year periods. Prior to that date, the online figures in this monitor refer to the unweighted non-food non store indicator, as published in the BRC-KPMG Retail Sales Monitor until July 2013.
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 May 2014 Monitor, covering the four weeks 4 May – 31 May, will be released at 00.01am Tuesday 10 June 2014.
The data is collected and collated for the BRC by KPMG.