- UK retail sales values were up 1.8% on a like-for-like basis from August 2012, when they had decreased 0.4% on the preceding year. On a total basis, sales were up 3.6%, against a 1.6% increase in August 2012.
- While the growth was broad-based, the home categories were the best performers, rebounding from July while Food was the slowest category due to the tough comparatives during the Olympics last year.
- Online sales of non-food products in the UK grew 15.0% in August versus a year earlier, on a weighted basis, representing its best performance this year. In August 2012, the unweighted RSM non-food non-store indicator had increased by 4.8% over the previous year, the lowest online growth ever recorded.
Helen Dickinson, Director General, British Retail Consortium, said: "While these figures don’t quite reach the lofty heights of what was an exceptional July, they’re keeping the good run going and are well above the 12-month average for sales growth. Taken hand in hand with a recent uptick in consumer confidence, the signs are that many of us are feeling a little more positive about the economic outlook and responding well to good deals and new autumn collections alike.
"Non-food had an impressive month, as retailers answered the continuing cautious optimism with good ranges and appealing promotions, especially in their back to school offers and items for the home. The category’s performances both in-store and online measure up well against below par showings in August 2012, when shopping took second place to watching the Olympics for many of us. In contrast, it wasn’t such a golden month for food, which performed strongly in 2012 as many of us stocked up on celebratory fare for the month of sport.
"Overall, these are very encouraging figures which maintain the sense that a consumer-led recovery is tentatively taking shape."
David McCorquodale, Head of Retail, KPMG, said: "This is a solid performance by retailers and demonstrates that confidence is slowly but surely returning to the UK’s high streets. Such a retail revival is particularly welcome after the disappointing sales seen last summer, when sales of non-food items ground to a halt as people were distracted by the Olympic Games.
"After suffering from some of the worst sales on record last year, furniture and flooring sales rebounded this month. It’s a positive sign that consumers feel confident enough about the future to make large scale, non-essential investments in their homes. Whether or not these investments are being powered by finance or consumers dipping into their savings remains to be seen – a debt or savings-fuelled spending bubble, of course, would not be sustainable in the long term. Back to school spending also boosted sales in August as shoppers stocked up on children’s clothes and shoes in preparation for the beginning of a new term.
"As summer fades to a close and the all-important approach to Christmas begins, retailers are turning their attention to their festive campaigns. However, if sales continue in this vein we should be optimistic that retailers will enjoy a reasonably healthy Christmas."
Food & Drink sector performance – Joanne Denney-Finch, Chief Executive, IGD, said: "August’s food and drink sales were always going to have challenging comparatives because of July’s unusually hot weather and last year’s Olympics. Despite this, the beginning and end of the month had relatively strong total sales.
"In these circumstances, it’s difficult to get a sense of whether consumer confidence is building in line with other positive economic news. Our own shopper research provides some reasons for optimism.
"There’s a noticeable fall in the number of shoppers expecting food prices to become much more expensive: 17 per cent now, compared to 27 per cent at the start of the year. Coupled with this, we’re also seeing much more appetite from shoppers for new products and innovation.
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 September 2013 Monitor, covering the five weeks 25 Aug – 28 Sep, will be released at 00.01am Tuesday 8 October 2013.
The data is collected and collated for the BRC by KPMG.
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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KPMG LLP, a UK limited liability partnership, is a subsidiary of KPMG Europe LLP and operates from 22 offices across the UK with over 10,000 partners and staff. The UK firm recorded a turnover of £1.8 billion in the year ended September 2012. KPMG is a global network of professional firms providing Audit, Tax, and Advisory services. We operate in more than 156 countries and have more than 152,000 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. KPMG International provides no client services.
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