BRC – KPMG RETAIL SALES MONITOR OCTOBER 2017


  • In November, UK retail sales increased by 0.6% on a like-for-like basis from November 2016, when they had increased 0.6% from the preceding year.
  • On a total basis, sales rose 1.5% in November, against a growth of 1.3% in November 2016. This is in line with the 3-month and 12-month averages of 1.4% and 1.5% respectively.
  • Over the three months to November 2017, In-store sales of Non-Food items declined 3.0% on a Total basis and 3.7% on a Like-for-like basis. On a 12-month basis, the total decline was 2.2%, the deepest since our records began in January 2012.
  • Over the three months to November, Food sales increased 2.8% on a like-for-like basis and 4.0% on a total basis. This remains above the 12-month Total average growth of 3.4%, the highest 12-month average since March 2013.
  • Over the three-months to November, Non-Food retail sales in the UK decreased 1.2% on a like-for-like basis and 0.6% on a total basis, below the 12-month Total average growth of 0.0%. This is the lowest 3-month average Total Non-Food growth since May 2011, excluding Easter distortions.
  • Online sales of Non-Food products grew 6.5% in November, below both the 3-month and 12-month averages of 7.3% and 8.0% respectively. Online penetration rate increased from 26.3% in October 2016 to 27.4% in October 2017, the highest on record.

 

Helen Dickinson OBE, Chief Executive, British Retail Consortium:

“November brought relief as growth in retail sales perked up after last month’s dip. Black Friday, the big retail event of the month, failed to fundamentally shift underlying trends in spending. Food sales were responsible for pretty much all the growth this month as higher prices continue to absorb more of the weekly shopping budget. Non-food sales - the focus of Black Friday –fell, as the squeeze on household incomes continues to impact discretionary spend.

“That’s not to deny that Black Friday was a significant event. Sales of non-food products that week were over 40 per cent higher than in the other weeks of the month, while it was the biggest week ever for non-food products online. However, rather than increasing overall sales, the event has shifted spending away from other parts of the festive period, and focusses shoppers’ attentions online and away from stores.

“There was a mixture of performances across the industry over Black Friday itself, with retailers reporting shoppers being tempted solely by generous promotions, but resisting other items. Gaming, wearable tech and ‘internet of things’ performed well, while toys, last year’s star performer, saw sales sharply down this year.

“This year’s Black Friday has demonstrated that in such a tough economic environment, consumers have become ever more careful, willing to wait and deploy their discretionary income only when they see an exceptional bargain. That heralds a challenging festive period ahead for retailers and shoppers alike.

“With current conditions likely to persist into next year, the Government needs to do all it can to support the UK’s consumers, not least by securing a fair Brexit for them in the forthcoming trade negotiations.”

Paul Martin, Head of Retail, KPMG:

“Retailers will be wondering whether the juice is worth the squeeze, with Black Friday sales resulting in a meagre 0.6 per cent uptick in like-for-like growth, when compared to November last year. In what has been a difficult year for the industry, any growth is most welcome, but profitability is what remains paramount.

“Despite Cyber Monday falling outside November’s figures, sales growth was clearly more prominent online, with non-food online sales up 6.4 per cent on last year and penetration rates as high as 27.4 per cent. After previous in-store stampedes, it is clear that retailers are increasingly moving Black Friday away from the high street.

“New shoes as well as health and beauty products are what filled online baskets thanks to timely promotion, but surprisingly toys and baby equipment didn’t appear to make much headway. It’s most likely that growth in toy sales were simply overshadowed by the bumper sales growth recorded last year, rather than being overlooked completely.

“In what remains of this year, the difference between success and failure will be akin to retailers walking a tightrope. Retailers would be wise to focus on differentiation, personalisation and ensuring the availability of their products in the coming weeks.”

Joanne Denney-Finch, Chief Executive, IGD:

“This reporting period, spanning from Halloween to Black Friday, is increasingly vital for retailers in its own right and not just as the precursor for Christmas. Grocery retailers will therefore be pleased that the robust sales trend continued throughout November.

“It has been a good year so far for grocery sales, although the final verdict hinges on the four weeks still to come. Christmas shopping could be a bit more spontaneous this year given that 60 per cent of shoppers say they usually end up buying unplanned products at this time, up from 53 per cent in 2016." 

UK Growth rankings table:

Food/Non-Food Quarterly Analysis: 3-month average % change year-on-year

 

Monthly Retail Sales - % change year-on-year

Non-Food Online Growth rankings table:

 

Non-food online retail sales