London, 2017-Jun-06 — /EPR Retail News/ —
BRC – KPMG RETAIL SALES MONITOR MAY 2017
Covering the four weeks 30 April – 27 May 2017
- In May, UK retail sales decreased by 0.4% on a like-for-like basis from May 2016, when they had increased 0.5% from the preceding year.
- On a total basis, sales rose 0.2% in May, against a growth of 1.4% in May 2016. This is the lowest since January, excluding Easter distortions, and below the 3-month and 12-month averages of 1.9% and 1.2% respectively.
- Over the three months to May, Food sales increased 3.2% on a like-for-like basis and 4.3% on a total basis. This is the strongest 3-month average since February 2012, excluding Easter distortions. This pulls the 12-month Total average growth to 2.2%, the highest since January 2014.
- Over the three-months to May, Non-Food retail sales in the UK decreased 0.3% on a like-for-like basis and increased 0.1% on a total basis, below the 12-month Total average growth to 0.5%. May’s Total Non-Food performance was the worst recorded since May 2011.
- Over the three-months to May, Online sales of Non-Food products grew 7.0% while In-store sales declined 1.8% on a Total basis and 2.3% on a like-for-like basis, below the like-for-like 12-month average decline of 2.0%.
Helen Dickinson OBE, Chief Executive | British Retail Consortium said: “After the pick-up in sales over Easter, consumer spending slowed again in May resulting in almost flat growth on the previous year. Underneath the headlines, there’s continued variation in the performance of food versus non-food products, as sales performance of the two become increasingly polarised. Food sales, albeit positively distorted by inflation, continue to see annual growth, while in non-food categories which are predominantly capturing discretionary spending, retailers find themselves having to compete even harder.
“Overall, May’s sales slowdown is indicative of a longer term trend of a decline in consumer spending power. As household budgets become increasingly squeezed by inflation, predominantly in the non-retail part of the consumer basket, it’s vital that the next Government helps retailers keep prices low for ordinary shoppers. This means, as well as securing a tariff-free trade deal with the EU, negotiating frictionless customs arrangements; providing certainty for EU colleagues working in the UK; and ensuring the continuity of existing EU legislation as it transfers into UK law.”
Paul Martin, UK Head of Retail | KPMG said:
“After the surge in retail sales last month – the by-product of this year’s relatively late Easter – retailers have been brought back down to earth with a thump. Like-for-like retail sales contracted in May, which is likely to represent a more accurate depiction of the state of UK retail currently.
“The impact of inflationary pressures on the nation’s purse continues to play out in this month’s figures, with shoppers evidently spending more on food and drink than on non-food purchases. With inflation continuing to rise and wage growth stagnating, consumers are starting to feel the pinch – although the highly competitive nature of the UK grocery market continues to play out in the consumer’s favour.
“Many retailers, particularly fashion stores, will be poised and ready to make the most of the upcoming summer, so hopefully the weather will play fair. An increased focus on managing costs will dominate the retail agenda. More imminently though, eyes will be firmly placed on the outcome of the General Election, with close attention being paid to the implications it might have on the industry.”
Food & Drink sector performance | Joanne Denney-Finch, Chief Executive | IGD said:
“Food and drink sales were again strong in May, not quite reaching the heights of average growth from the previous two months, but maintaining the trend for year-on-year growth. This was mainly attributable to inflation combined with warm weather in the run-up to the late May bank holiday. The sustained sunshine saw beers, wines and spirits enjoy double-digit growth.
“With no big summer event beyond the regular schedule this year, sales over the next few months will hinge largely on the weather. Hot conditions encourage impulse buying. For instance, over a third (34 per cent) of shoppers say they tend to revert at the last minute to a barbecue when the weather is good.”
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Source: BRC