- UK retail sales values were 0.6% lower on a like-for-like basis from October 2010, when sales had risen 0.8%. On a total basis, sales were up 1.5%, against a 2.4% increase in October 2010.
- Food sales growth slowed and non-food sales also weakened, with big-ticket items suffering most. Clothing and footwear were hit by the unseasonably mild weather. Homewares remained tough and often deal-driven. Uncertain prospects for personal finances and the economy continued to make shoppers careful, giving priority to essentials and replacements over discretionary items.
- Non-food non-store (internet, mail-order and phone) sales growth picked up a little in October after falling back in September. Sales were 11.5% up on a year ago, more than the 10.1% in September but less than in August and than the 12.8% in October 2010.
Stephen Robertson, Director General, British Retail Consortium, said: "Which part of the wave we're riding varies from month to month but the water is consistently chilly. For a fifth month, total sales growth continues its strangely regular flip-flopping between 2.5 and 1.5 per cent. But, the year-to-date figure, which smooths out these minor moves, is unchanged from the previous month. This is evidence of the basic weakness of consumer confidence and demand and worrying this close to Christmas
"Underneath the headline figure, the year-to-date results show almost no growth in non-food sales. Allowing for the VAT rise since last year, that suggests a substantial drop in sales volumes while the food figures indicate very little volume growth. It’s clear customers are cutting back whatever they're buying.
"A lasting lift in consumers' mood needs a sense that better times will come for jobs, costs and incomes. The Chancellor should use this month's Autumn Statement to help customers and businesses by offering hope over next year's planned fuel duty and business rates increases."
Helen Dickinson, Head of Retail, KPMG, said: "With so much uncertainty across European and global markets, UK consumers remain reticent as their personal finances become harder to manage.
"The beginning of the month continued with the trend we saw at the end of September: the warm weather helped to boost food sales to the detriment of clothing and other non-food sectors. By the end of the month the gap narrowed, food growth slowed and non-food retrieved some of the momentum lost over the previous few weeks. The month overall saw ongoing challenges for big-ticket items and continued high levels of volatility across individual weeks and different sectors.
"But one constant remains: to whatever extent sales are being made, margins and hence profits are being impacted to stimulate demand as retailers strive to cope with the new reality. The success of the Christmas season for retailers hangs in the balance as October’s results do not set a strong foundation."
Food & Drink – Joanne Denney-Finch, Chief Executive, IGD, said: "Food and drink sales received a boost at the start of the month, benefiting from the tail-end of the Indian summer, but this wasn’t sustained over the following weeks.
"The constant trickle of negative economic news, such as the euro crisis, has not helped to improve consumer sentiment. Shoppers are watching every pound they spend and, with thoughts turning to Christmas, they may be making some sacrifices now in order to end the year on a high. Our latest ShopperTrack research shows six in ten shoppers (61%) intend to spend more or the same as last year on food and drink over the festive period."
Non-Food Non-Store* - Stephen Robertson, Director General, British Retail Consortium, said: "Online sales growth is up on September and still beating store sales performance by a wide margin but mounting pressure on customers' disposable incomes has noticeably weakened the underlying pace of that growth. In the 12 months to this October it averaged 12.1 per cent, noticeably less than the 17.2 per cent over the 12 months before that. The basic expansion of internet shopping continues but sales values are not rising as quickly as they were because customers don't have money available and, even where they do, are less likely to buy goods that aren't on special offer."
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 Nonfood 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 re-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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British Retail Consortium
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Richard Dodd, 0207 854 8924
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Katrin Boettger, 0207 896 4232
The November 2011 Monitor, covering the four weeks 30 October – 26 November, will be released at 00.01am Tuesday 6th December 2011.
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
is a global network of professional services firms providing audit, tax, and advisory services with industry focus. Our aim is to turn knowledge into value for the benefit of our firms’ clients, people, and the capital markets. With nearly 94,000 people worldwide, KPMG member firms provide audit, tax, and advisory services from 717 cities in 148 countries.
Food Data Supplied by IGD
makes a difference by providing international market intelligence, supply chain best practice and consumer insight to the food and grocery industry worldwide.
We work with consumers, companies and individuals across the chain to provide authoritative information, insight, thought leadership and leading edge best practice to help companies grow their business and develop their people.