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BRC-KPMG: April 2015 like-for-like retail sales down 2.4% on April 2014

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UK retail sales decreased by 2.4% on a like-for-like basis from April 2014, when they had increased 4.2% on the preceding year. On a total basis, sales were down 1.3%, against a 5.7% rise in April 2014. Adjusted for the BRC-Nielsen Shop Price Index deflation, total growth was 0.6%.

- The figures are negatively distorted by the inclusion of the build-up to Easter in March this year against April last year. The 3-month average, which removes the distorting effect of Easter, showed the strongest underlying growth since last June.

- Total Food sales grew 0.4% over the 3 months to April, ahead of their 0.6% decline over the last 12 months. Total Non-Food sales grew 3.2% over the same period and also outperformed their 12-month average growth of 3.0%. The fashion and beauty categories outperformed while the home ones underperformed.

- Online sales of Non-Food products in the UK grew 15.4% in April versus a year earlier, when they had grown 11.2%. The Non-Food online penetration rate was 17.6%, up from 15.9% in April 2014.

Helen Dickinson, Director General, British Retail Consortium, said: "April witnessed a solid performance for fashion and beauty retailers; particularly welcome following a disappointing Autumn/Winter season. While the early Easter this year heavily distorted April's figures, across all categories, we see the best three month average year-on-year growth since June of last year; a clear indication that confidence among consumers is slowly improving and that despite profitability being under intense pressure due to changes in shopping habits and promotional activity, retail remains a robust pillar of the economy.

Among the non-food categories, the only ones which saw a dip were in homewares, which was to be expected due to the timing of Easter. Consumer spending on food over the past three months also increased, with sales rising by 0.4 per cent compared to the same period last year. This is reasonably encouraging when we consider the structural changes and very competitive market in which grocery retailers find themselves operating."

David McCorquodale, Head of Retail, KPMG, said: "With an early Easter pulling sales forward into March, top-line trends for April inevitably look pretty weak. However, taking the three months to April to eliminate seasonality, this is a bit of an April fool, as retail sales have continued their steady rise through the year and increased by 1.9%. In particular, the sunniest April since records began gave a boost to fashion sales, driving demand for spring/summer clothing and footwear with consumers also taking advantage of Easter sales to bag a bargain.

Food sales for the quarter grew by less than half a percent but this is still positive compared to the declines felt through most of 2014. Like for like grocery sales continue to decline but the long road to recovery appears to be taking some direction.

Looking ahead, the birth of Princess Charlotte together with the promise of more warm weather on the horizon will boost consumers' feel good factor and encourage spending as we head into the summer months. Added to this, with David Cameron firmly in place at No. 10, retailers will be looking to ensure he fulfils his promise not to increase VAT and also to review business rates. It is also hoped that a stable government can allow consumer confidence to flourish."

Source : British Retail Consortium
www.brc.org.uk/brc_news_detail.asp?id=2806

12 May 2015

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