- UK retail sales were down 0.3% on a like-for-like basis from July 2013, when they had increased 2.2% on the preceding year. On a total basis, sales were up 1.3%, against a 3.9% rise in July 2013. The three-month average total sales growth, 1.3%, is below the twelve-month average of 2.3%.
- Furniture was the best performing category, reporting its highest growth since January, excluding Easter distortions. Meanwhile, Food was the worst performing category and experienced its deepest three-month average decline since our records began in December 2008.
- Over the last three months, Food showed a decline of 1.4%, in contrast with the growth of 0.4% experienced over the last twelve months. Non-Food reported growth of 3.4% over the three months to July 2014, in line with its twelve-month average of 3.8%.
- Online sales of non-food products in the UK grew 14.9% in July versus a year earlier. The Non-Food online penetration rate was 16.7% in July, 1.4 percentage point higher than in July 2013.
Helen Dickinson, Director General, British Retail Consortium, said:
"This July we have achieved overall growth of 1.3 per cent year on year, which at first glance compares unfavourably with the 2.3 per cent long-term rate over the last twelve months. However, July last year was a tough month to beat because consumers had really responded well to high profile exciting sporting events and of course, the birth of the royal baby. Food experienced its deepest three-month average decline since at least December 2008, explained partly by the continuing keen price competition between supermarkets, which consumers are taking full advantage of, and record low food inflation.
"The home categories showed a pick up this month after performing less well in June; furniture reported its highest growth since January excluding Easter distortions and home accessories and house textiles (especially lightweight bedding) all did well. Understandably, outdoor products sold well as did overall toys and baby equipment.
"Non-food online sales continued to show strong growth, the third highest this year, driven notably by furniture, kitchen appliances, gaming and toys."
David McCorquodale, Head of Retail, KPMG, said: "The tale of two sectors continues with polarisation between food and non-food. While non-food retailers had a stellar month, surpassing even last year’s record sales performance, the grocers saw sales tumble in value as their competitive pricing continued.
"Fashion retailers are enjoying a better summer, even against tough comparatives that included a heatwave, royal baby and a British Wimbledon champion, and many have avoided the price cutting sprees seen last year. There was even a bounce back in furniture and household spend following a softening in June.
"The grocers’ figures continue to make for gloomy reading for the sector. The impact of their prolonged discounting campaigns may be good news for consumers, but must be being felt deeply by the retailers given like for like sales have fallen in value every month for the last 12 months, save for April when Easter helped sales. The headache for the grocer investor is the tonic for the consumer: it’s likely these price wars are here to stay for the foreseeable future."
Food & Drink sector performance – Joanne Denney-Finch, Chief Executive, IGD, said: "Warm weather is usually good for food and drink sales but since last July was hotter than this, year-on-year food retail sales were again disappointing.
"However, the stream of positive economic news is having some effect on shopper sentiment. A fifth (20%) of them are planning to prioritise quality over saving money in their grocery shopping compared with 16% who said this a year ago, according to our latest ShopperVista research. With low inflation and a gradual return to wage growth, people are slowly becoming better placed to act on this rising focus on quality."
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 August 2014 Monitor, covering the four weeks 3 August – 30 August, will be released at 00.01am Tuesday 9 September 2014.
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.
Sponsored and Administered by
KPMG LLP, a UK limited liability partnership, is a subsidiary of KPMG Europe LLP and operates from 22 offices across the UK with approximately 11,500 partners and staff. The UK firm recorded a turnover of £1.8 billion in the year ended September 2013. KPMG is a global network of professional firms providing Audit, Tax, and Advisory services. It operates in 155 countries and has 155,000 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.
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