- UK retail sales values were down 0.1% on a like-for-like basis from October 2011, when they were down 0.6% on the preceding year. On a total basis, sales were up 1.1%, against a 1.5% rise in October 2011.
- Excluding Easter, this was the lowest growth in total sales since November 2011. The slowdown from last month was felt across all categories, including online sales.
- With a 3-month average of 3.4%, food was more resilient than non-food. However, once inflation is stripped out, volume growth for food was stagnant.
Stephen Robertson, Director General, British Retail Consortium, said: "Unfortunately it looks like the modest sales revival we saw in September was something of a false dawn. Excluding April, hit by this year’s earlier Easter, October saw the worst sales growth since last November. And October’s poor performance wasn’t a one off. Year-to-date average growth hasn’t outpaced inflation meaning overall sales volumes going backwards. Within that, October’s online, non-food, results were especially poor. The last three months now include the two weakest growth rates we’ve recorded in four years.
"The disappointing figures are a reminder of the difficult economic realities many are still facing. Falling consumer confidence means people are limiting spending to essential items and are cautious about committing to big-ticket and discretionary buying.
"Half-term fell later this year, so lower footfall translated into patchy performances across the categories.
"This underwhelming showing means there’s all to play for as Christmas approaches."
David McCorquodale, Head of Retail, KPMG, said: "October’s sales figures were like a disappointing firework – full of promise initially but eventually fizzing out with a whimper. With the touch paper lit from strong September sales figures and positive broader economic figures emerging through the month, it was broadly anticipated that we’d have a strong October.
"Like a rocket, clothing and footwear sales soared into double-digit like-for-like growth in the first week but then faded in the latter half of the month, showing that consumers may have bought into autumn/winter collections but are still too nervous to fill their wardrobes with them.
"The recession may officially be over but it will take a little longer for consumers to feel they can spend freely again. Retailers are holding less stock than a year ago and may choose to be cautious with pre-Christmas sales in order to protect margins. However, the disappointing sales figures for October indicate that winning share of the Christmas wallet will be just as competitive over the next two months as it was last year."
Food & Drink – Joanne Denney-Finch, Chief Executive, IGD, said: "October’s food and grocery sales were relatively flat with the best sales at the end of the month in the lead up to Halloween.
"Hopefully the run-up to Christmas will give the economy the boost everyone is looking for. If there's to be a ‘feel good’ factor resulting from the recent GDP and employment figures then this should start to come through in November.
"Our ShopperVista research shows that 53 percent of people are still prepared to pay extra for high quality ingredients and so there is reason for optimism that a high proportion will splash out on food and drink over the festive season."
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 this non-store channel. It should be noted that online sales are still a 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 November 2012 Monitor, covering the four weeks 28 October – 24 November, will be released at 00.01am Tuesday 4 December 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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