Retail Sales Monitor
A perfect storm for retail in February
Helen Dickinson OBE, Chief Executive, BRC:
“Clouds continued to hang over the retail industry in February, as storm Ciara, Dennis and Jorge took their toll on retail sales, particularly in fashion. Despite many indicators suggesting a rise in confidence among UK shoppers in recent months, this has failed to translate into higher retail sales. However, the end of the month saw a slight rise in spending on food and healthcare as a result of concerns around coronavirus.
“Retailers are working hard to reduce their environmental impact, keep supply chains working smoothly and investing in new technologies. However, they are hindered by government policies, such as sky-high business rates, which limit investment. In tomorrow’s Budget we hope the Government will take the opportunity to relieve the business rates burden bearing down on the shoulders of the industry. Scrapping downwards phasing of transitional relief, which has forced retailers to subsidise other industries by almost £550m over the last three years, would allow more money to be invested back into people, property and technology all over the UK.
“Retailers continue to face a multitude of challenges, from sky high business rates to reducing the environmental impact of produce. In tomorrow’s Budget we hope the Government will take the opportunity to relieve the business rates burden bearing down on the shoulders of the industry. Scrapping downwards phasing of transitional relief, which has forced retailers to subsidise other industries by almost £550m over the last three years, would allow more money to be invested back into people, property and technology all over the UK.”
Paul Martin, Partner, UK Head of Retail, KPMG:
“Returning consumer confidence has done little to benefit retailers, with February’s sales growth down 0.4 percent on a like-for-like basis. The highly anticipated ‘Boris Bounce’ has clearly struggled to materialise in the embroiled retail sector, and looking ahead Covid-19 isn’t likely to help matters. Subdued grocery has shown a slight recovery, although the edging up of prices will have contributed to that growth. In the short-term, any potential supply chain disruption caused by Covid-19 will be felt acutely by grocers, so developments will have to be watched closely.
“February saw the UK get hit by one storm after another, so it’s unsurprising that online fared fractionally better than the high street. Generally though, demand for non-food items remains woefully low.
“The coming weeks will be of key importance to the sector. Retailers will be hoping that the Chancellor can provide stability and certainty after prolonged volatility and uncertainty. Business rates will be front of mind for many, but it remains to be seen whether any form of relief will be offered. Even then, that relief could be too little too late for some of those struggling.”
Food & Drink sector performance, Susan Barratt, CEO, IGD:
“After a decidedly lacklustre start to 2020, food and grocery sales in February saw a clear uptick from January with an increase in like-for-like and total growth. Things like the timing of Valentine’s Day on a Friday certainly played a role in the middle of the month. Also, with increased attention on Coronavirus, it seems likely this may have had a modest impact over the last week in particular with shoppers buying extra food and grocery items.
“On a positive note, 20 percent of food and grocery shoppers now say they will focus more on quality in the year ahead (vs 15 percent Feb’19) – this is the highest level since August’16. This is now higher than those who will focus more on saving money (19 percent ).”