- UK retail sales values were up 1.3% on a like-for-like basis from May 2011, when they were down 2.1% on a year ago. On a total basis, sales were up 3.4%, against a 0.3% decline in May 2011.
- Miserable weather at the start of the month turned to glorious sunshine which boosted sales of food and drink, clothing and footwear to turn around what could have been a dismal May.
- Food sales rose modestly from their year-earlier level, helped by sunny weather boosting seasonal produce. Big-ticket items continued to struggle as consumers’ underlying caution about jobs and the economy restrained larger big-ticket purchases.
- Online (including mail-order and phone) sales of non-food items showed stronger growth, up 12.4% against growth of 10.4% last year. Sales growth returned to levels more consistent with the 12-month average
Stephen Robertson, Director General, British Retail Consortium, said: “As the relentlessly difficult underlying conditions continue to make trading tough for retailers, any temporary boost is of even greater importance and retailers had plenty of reason to celebrate the eventual arrival of summer at the end of May. Much of the month’s positive performance can be attributed to spending in the final week when consumers responded enthusiastically to the sun coming out.
“It’s likely the prolonged wet period helped create pent-up demand and people also felt more relaxed about their spending as the sun created a feelgood boost. Small numbers of customers buying jeans and knitwear in the first weeks of May became many more people purchasing skirts, shorts and swimwear by the end of the month. Womenswear had its best growth this year, while garden centres enjoyed a boom in the number of people investing in new lawnmowers to tackle overgrown grass.
“The performance of food retailers was more consistent across the month but again there was a marked change in the type of products customers were buying. Retailers will be hoping the boost continues, sustained by this summer’s celebrations and sporting events.”
Helen Dickinson, Head of Retail, KPMG, said: “Retailers are hoping that the Jubilee celebrations will have helped to pull out them of the mire, but a short-term patriotic spending spree will not overcome the underlying difficulties facing the industry - which remains under pressure from a combination of declining consumer confidence and squeezed incomes.
“After a dismal April, May was a much better month and many retailers will be breathing a small sigh of relief. No sector put in a star performance, but a focus on spending on children was evident and childrenswear saw a double-digit uplift in sales. Businesses in the home-related sectors, where good weather runs counter to strong performance, found the going much tougher. Those not selling big-ticket home-related items are hoping the sun stays out all summer long.”
Food & Drink – Joanne Denney-Finch, Chief Executive, IGD, said: “The belated sunny weather helped May’s food and grocery sales end on a high. The intense competition between retailers offering petrol vouchers also helped attract people into stores. Food companies will be hoping for this momentum to continue into June as big national celebrations, such as the Jubilee, usually encourage people to splash out on food and drink. The unique coincidence of the Jubilee, Euro 2012 and the Olympics occurring back-to-back could engender a real sense of patriotism this summer and a boost for locally sourced products. Nearly half (47%) of shoppers already tell us that supporting local or British producers is important to them when choosing grocery products.”
Online* (Non-Food) - Stephen Robertson, Director General, British Retail Consortium, said:
“Online sales have returned to healthier growth after an unusually weak month in April, in part due to the timing of Easter. It’s back in line with the six-month average and higher than the 12-month rolling average. The feelgood sunshine boost saw strong sales of summer fashions as well as outdoor leisure and gardening gear. Consumers planning ahead for the Jubilee celebrations and other summer events are also likely to have made earlier purchases online than they would have through traditional channels.
“The sharpest growth continues to come from shopping happening via smart phones and other mobile devices. A number of retailers are encouraging smart phone use in their stores, which is feeding into this trend.”
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.
* VAT changes: from 17.5% to 15% on 1st Dec 2008; to 17.5% on 1st Jan 2010; to 20.0% on 4th Jan 2011.
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 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 this non-store channel. It should be noted that online sales are still a very small proportion of total UK retail sales. Estimates based on ONS figures show about 9 per cent of total UK retail sales (food and non-food) are achieved via the non-store channel.
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 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 June 2012 Monitor, covering the four weeks 27 May – 30 June, will be released at 00.01am Thursday 10th July 2012.
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 11,000 partners and staff. The UK firm recorded a turnover of £1.7 billion in the year ended September 2011. KPMG is a global network of professional firms providing Audit, Tax, and Advisory services. We operate in 152 countries and have 145,000 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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