- UK retail sales values were 0.6% lower on a like-for-like basis from August 2010, when sales had risen 1.0%. On a total basis, sales were up 1.5%, against a 2.8% increase in August 2010.
- Food sales growth was similar to that in July. Non-food sales fell further below their year-earlier level, with footwear and homewares showing the largest declines, despite further promotions. Big-ticket purchases were still often deal-driven, hit by fragile consumer confidence and the weak housing market.
- Non-food non-store (internet, mail-order and phone) sales growth picked up to the best since April. Sales were 12.6% higher than a year ago, after a relatively weak 9.6% in July but 17.8% in August 2010.
Stephen Robertson, Director General, British Retail Consortium, said:
"The retail sector’s performance for August has been essentially flat, particularly bearing in mind the increase in VAT which will be responsible for some of the growth in spending. It remains a tale of two halves. The food sector has proved more resilient but non-food retail showed a marked decrease in sales year-on-year.
"The spell of hot weather at the start of the month was a boost for some retailers but it failed to last long enough to make a big impact. People had bought summer fashions early during the Spring heatwave and were reluctant to spend again while families left the traditional back-to-school purchases until late in the month, possibly hoping to benefit from further promotions.
"The riots were not widespread or prolonged enough to have a significant impact on these UK-wide figures. Poor consumer confidence, high inflation and the on-going squeeze on personal finances remain the biggest threats to the retail sector. Sales of big-ticket items are very dependent on discounting and many retailers’ margins are being cut to the bone."
Helen Dickinson, Head of Retail, KPMG, said:
"The weaker sectors are really struggling. For non-food, the picture is disheartening with one of the worst monthly results of the year thus far - toiletries, cosmetics, and menswear the only sectors showing growth.
"The differential between food and non-food performance continues to grow with food sales in value terms remaining relatively resilient. Given that much, if not all, of the growth is inflation and a higher VAT rate versus last year, this isn’t particularly good news for retailers as they struggle to maintain their margins.
"Promotional activity remains high to drive footfall and interest which is a delicate balancing act for retailers to ensure the volume uplift compensates for the margin losses."
Food & Drink – Joanne Denney-Finch, Chief Executive, IGD, said:
“August’s food and drink sales had a good start, but tailed off as the month progressed. The coolest summer for nearly 20 years and faltering global stock markets dented shopper confidence.
“Despite the riots in August many communities reacted positively. This sense of shoppers’ support for their communities is highlighted in our latest ShopperTrack research: more than four in ten of them said they bought a grocery product from their local area or region last month. This is the highest level recorded this year.”
Non-Food Non-Store* - Stephen Robertson, Director General, British Retail Consortium, said:
"Non-food non-store sales have picked up after a period of slower growth earlier in the year. August’s performance is the strongest since April, which benefitted from warm weather and the later timing of Easter.
“Retailers are benefitting from high-levels of promotional activity, although this means sales are often being made at the expense of margins. Consumers are more and more comfortable using the internet to compare prices and it seems a higher number of online visits are being translated into sales. It’s still the case that customers are motivated by value and are seeking out bargains and discounts.”
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 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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The September 2011 Monitor, covering the five weeks 28 August – 1 October, will be released at 00.01am Tuesday 11th October 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.
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