- UK retail sales were down 1.7% on a like-for-like basis from March 2013, when they had increased 1.9% on the preceding year. On a total basis, sales were down 0.3%, against a 3.7% increase in March 2013.
- The 3-month average total growth was 2.1%, just below the 12-month trend of 2.4%. A clearer underlying picture should appear in April, when the Easter distortion is reversed.
- The Food and Home categories, the most affected by the Easter distortion, showed a decline, while the fashion categories showed record growth, flattered by a low comparable period.
- Online sales of non-food products in the UK grew 12.8% in March versus a year earlier. The online penetration rate achieved 17.3% in March. Excluding online sales, total Non-food sales would have shown a decline in March.
Helen Dickinson, Director General, British Retail Consortium, said:
"These sales figures are stronger than might have been expected given the fact that Easter has fallen so late this year.
"Fashion has performed particularly well. Retailers have worked hard to create popular new collections, and have been rewarded with strong demand for women’s clothing and footwear in particular. This improves on the slow start to the season last year when shoppers were more reluctant to spruce up their wardrobes.
"Unsurprisingly compared to last year, categories that perform strongly over the extended Easter break have seen lower sales. Household accessories and furniture are often key purchases over the holiday, and have seen a decline. With the later school holidays, the same has been the case for children’s clothing. Retailers will be looking forward to April’s results to see how this balances out over the period."
David McCorquodale, Head of Retail, KPMG, said: On face value retail sales in March appear flat, but in fact the figures are distorted by the timing of Easter, which fell in March last year boosting sales and making direct comparisons difficult.
Putting Easter distortions aside, the overall picture looks encouraging. The long term trend shows that sales are moving in a positive direction, albeit it at a rate of 2.1 per cent which is just above inflation. Sales of clothing and footwear fared well this month, helped by favourable weather. This is a very different picture to last year when cold weather depressed sales and fashion retailers had a dismal month.
There are, however, areas of concern. Food sales fell in like-for-like value again this month and the decision by some of the major grocers to go head to head in a billion pound price war will exacerbate this situation. Investors and analysts will be keeping a keen eye on the sector as they wait to see how these discounts will impact profits and performance, but the winner in this case will be the consumer.
Looking ahead, the Easter effect and the school holidays should deliver a healthy boost to sales in April. If the weather is fine, shoppers will head to the high street to enjoy the bank holiday break, helping sales of spring ranges, home accessories and children’s clothing.
Food & Drink sector performance – Joanne Denney-Finch, Chief Executive, IGD, said: "This month’s food and drink figures are hard to compare given that Easter fell in March last year but there is no evidence yet that mainstream food retailers have benefited from the economic upturn.
"There are, however, some hopeful signs for this Easter.
"Our ShopperVista research shows more than four in ten (43 per cent of) shoppers are planning to prepare at least one special meal over the Easter weekend, up from 38 per cent who said this last year. The number intending to cut back on food gifts including chocolate eggs has fallen to 19 per cent, compared to 29 per cent last year."
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 April 2014 Monitor, covering the four weeks 6 April – 3 May, will be released at 00.01am Tuesday 13 May 2014.
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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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