- UK retail sales values were up 0.7% on a like-for-like basis from September 2012, when they had increased 1.5% on the preceding year. On a total basis, sales were up 2.4%, against a 3.4% increase in September 2012 and in line with the 12-month moving average.
- The growth was driven by electricals and leisure goods, while Food experienced a decline in like-for-like sales..
- Online sales of non-food products in the UK grew 13.4% in September versus a year earlier. Our online monitor published for the first time provides further analysis of online sales. Over the past three months, online contributed a third of the total non-food retail growth.
Helen Dickinson, Director General, British Retail Consortium, said: "The BRC-KPMG data shows that while total retail sales have continued to grow this month, it has been the weakest growth so far this year if you exclude Easter distortions. Grocery sales have been particularly hard-hit. However, we have seen strong demand for children's footwear and clothing, benefiting from the back-to-school period, and the continued improvement in the UK housing market is beginning to make a difference in the retail sector, shown by a strong performance in home accessories.
“Online sales were again the stand out performer, growing by double digits, and contributed strongly to non-food sales such as electricals and leisure items. The launch of our new Online Retail Sales Monitor highlights this, and in fact, without the contribution of online, clothing and footwear sales would have declined in September.
“Retailers are hiring extra staff and readying their offer for the crucial Christmas period at the moment, so they will be looking at these figures closely as they gear up for the festive season."
David McCorquodale, Head of Retail, KPMG, said: “These figures are a reality check and will make retailers nervous as we enter the run up to Christmas. Unseasonably warm weather stifled sales of autumn and winter collections in September and the recovery in home related items flattened. Consumers are still cautious about spending and are reluctant to restock their wardrobes with winter woollies until the weather cools.
“Sales of children’s clothing and shoes put in a strong performance, but this surge is likely to simply be a hangover from the traditional back to school spending spree. The slowdown of the food and drink sales performance reflects the battleground for market share amongst the grocers.
“The stark fact is the retail recovery remains fragile and in the lead up to Christmas retailers, who are generally carrying less stock than in prior years, will need to manage promotional activity carefully to maintain margins.”
Food & Drink sector performance – Joanne Denney-Finch, Chief Executive, IGD, said: “With no major event last month, moderate weather and people back at work, September’s food and drink sales were unremarkable. Spending normalised after the hot summer encouraged people to loosen their purse strings a little.
“Food companies are now gearing up for Halloween, which gets bigger each year. The final quarter will be critical, as always and determine whether 2013 will be remembered as a flat or a modestly encouraging year for food and drink sales.
“And there’s all to play for. Four of ten (42 per cent of) shoppers tell us they will be shopping around more and choosing the best deals over the next few months.”
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 these non-store channels. It should be noted that online sales are still a small proportion of total UK retail sales. Estimates based on ONS figures show about 10 per cent of total UK retail sales (food and non-food) are achieved via the internet.
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 aggregation of data for the weighted ‘online’ figures has been performed by the BRC and KPMG for periods starting 25 November 2012 and equivalent prior year periods. Prior to that date, the online figures in this monitor refer to the unweighted non-food non store indicator, as published in the BRC-KPMG Retail Sales Monitor until July 2013.
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 October 2013 Monitor, covering the four weeks 29 Sep – 26 Oct, will be released at 00.01am Tuesday 5 November 2013.
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 LLP, a UK limited liability partnership, is a subsidiary of KPMG Europe LLP and operates from 22 offices across the UK with over 10,000 partners and staff. The UK firm recorded a turnover of £1.8 billion in the year ended September 2012. KPMG is a global network of professional firms providing Audit, Tax, and Advisory services. We operate in more than 156 countries and have more than 152,000 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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