- UK retail sales values were 1.6% lower on a like-for-like basis from November 2010, when sales had risen 0.7%. On a total basis, sales were up only 0.7%, against a 2.8% increase in November 2010. On both measures, sales performance was the weakest since May.
- Food sales growth was little changed from October’s 5-month low. Non-food sales fell further below their year-earlier level, with sales largely promotion-led. Clothing and footwear sales were hit by the mild weather, as well as by underlying uncertainty about jobs and incomes. Consumer caution continued to hit big-ticket homewares and furniture purchases most.
- Non-food non-store (internet, mail-order and phone) sales growth fell back in November after picking up in October. Sales were 8.6% up on a year ago, the weakest since March and half the previous November’s increase.
Stephen Robertson, Director General, British Retail Consortium, said: “There’s a worrying lack of cheer in these figures. The weakest increase in sales for six months suggests consumers are keeping a tight rein on their spending, despite Christmas being so near.
“This November’s mild weather contrasted with much lower temperatures last year, hitting sales of winter clothing and footwear particularly hard. Consumers are not quite in the Christmas mindset yet, although stores are working to generate much-needed sales with high levels of festive discounting. Retailers hope that customers who’ve managed their finances carefully in recent months will still treat themselves and their families in December, unhampered by the severe weather which disrupted shopping twelve months ago.
“The Autumn Statement’s bleak assessment of the UK recovery is the latest in a sequence of poor economic news which includes falling sales, rising unemployment and stubbornly high inflation. The Chancellor offered some modest assistance but, this close to Christmas, more concrete progress on measures to inspire confidence in consumers and businesses is badly needed."
Helen Dickinson, Head of Retail, KPMG, said: “The latest figures prove once more that the health of UK retailing is deteriorating. Christmas is a crucial trading period for the UK retail sector but this year many retailers will be nervous and unsure as to how the season will pan out. Cash-strapped consumers continue to be reticent and last week’s gloomy economic forecast by the Chancellor won’t help to boost confidence levels.
“Any sales are hard won, with high discount and promotion levels. Retailers’ performance is suffering because of weak top-line growth and declining margins, making the backdrop even more challenging. December will require some tough decisions for a number of retailers as they struggle to plot a path in such challenging conditions.”
Food & Drink – Joanne Denney-Finch, Chief Executive, IGD, said: “Households are feeling the squeeze on their incomes from pressures such as rising utility bills. The uncertain economic climate is clearly impacting on shopper sentiment: 52 per cent of them now expect to be worse off, nearly double the level seen in August 2010 (27 per cent).
“Despite the extraordinary economic climate, our research also shows eight out of ten people are still prepared to pay extra for premium food and groceries. Shoppers have indicated they may indulge themselves during the festive period: 71 per cent say they will spend more or at least the same on their Christmas meal, compared with last year.”
Non-Food Non-Store* - Stephen Robertson, Director General, British Retail Consortium, said: “The growth in non-food non-store sales looks impressive next to the sector’s overall performance but in fact this is its weakest result since Easter and business is growing at half the rate it was this time last year.
“Poor consumer confidence and squeezed disposable incomes are affecting all retail channels. Internet retailers are offering high-profile discounts and holding special one-day events ahead of Christmas in much the same way as high street traders, hoping to generate an uplift in spending. For the longer term, if online retailers are to reach their full potential, the UK Government must increase pressure on the European Commission to bring down barriers to trade and deliver its promised single digital market.”
Notes
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. Therefore like-for-like sales growth will always be lower than total sales growth. 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.
Non-Food Non-Store sales are transactions which take place over the internet, or via mail order or via telesales. Non-Food Non-Store sales growth is the percentage change in the value of all non-food non-store 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 Non-food Non-store sales are still a very small proportion of total UK retail sales. Estimates based on ONS figures show about 8 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 save 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 December 2011 Monitor, covering the five weeks 27 November – 31 December, will be released at 00.01am Tuesday 10th January 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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