BRC - KPMG Retail Sales Monitor March 2018


  • In March, UK retail sales increased by 1.4% on a like-for-like basis from March 2017, when they had decreased 1.0% from the preceding year.
  • On a total basis, sales rose 2.3% in March, against a decline of 0.2% in March 2017. This is above the 3-month and 12-month averages of 1.8% and 1.9% respectively, but is positively distorted by the timing of Easter.
  • Over the three months to March, in-store sales of non-food items declined 3.0% on a total basis and 4.0% on a like-for-like basis. On a 12-month basis, the total decline was 2.2%.
  • Over the three months to March, food sales increased 4.2% on a like-for-like basis and 5.3% on a total basis. This is the strongest 3-month average since July 2009 and above the 12-month total average growth of 4.4%, which itself is the highest since March 2012.
  • Over the three-months to March, non-food retail sales in the UK decreased 1.8% on a like-for-like basis and 1.0% on a total basis. This is below the 12-month total average decrease of 0.0%.
  • Online sales of non-food products grew 7.9% in March, against a growth of 6.6% in March 2017. This is above the 3-month and 12-month averages of 6.6% and 7.8% respectively. Online penetration rate increased from 20.6% in March 2017 to 22.0% in March 2018.

 

Helen Dickinson OBE, Chief-Executive | British Retail Consortium

“March paints a volatile picture for sales, which experienced peaks and troughs to deliver some modest growth on last year. The positive distortion from the timing of Easter pushed sales up by over 15 per cent during the holiday week compared with the rest of the month, only just making up for a sub-zero performance at the start of the month.

“There’s no doubt that the ‘Beast from the East’ and its successor played a significant role in deterring shoppers from making store visits. But it didn’t dampen consumers’ appetites towards food purchases, which saw the anticipated spike from the Easter festivities. This was in stark contrast to non-food sales which, despite some promotional- driven activity, bore the brunt of consumers’ disinterest in typical Springtime purchases, as well as the ongoing spending squeeze on non- essentials.

“There is hope that, with the gap between inflation and wage growth finally narrowing, consumers’ purse strings will slacken to some extent. But the grip on spending power will persist over the course of the year.

“So with the success of Brexit as the determinant of what we pay for products in 2021, the deal negotiated in the next six months needs to focus on reducing potential customs friction on the movement of goods between the UK and EU-27.”

Paul Martin, Head of Retail, KPMG

“March was difficult for large parts of the UK retail industry. Seemingly endless cold weather dissuaded would-be shoppers from the high street and a number of retailers delivered bad news. Great hopes were placed on Easter trading, but whilst the latest figures point to overall improvement when compared to recent months, the Easter boost didn’t quite measure up to previous years.

“The divide between food and non-food sales became further pronounced, with food clearly the winner. This came at the expense of other categories, with few others noting growth.

“Retailers with an online presence were far more fortunate, with a marked lift in all categories. The cold weather clearly persuaded shoppers to peruse from the comfort of their own homes, with beauty and clothing grabbing the most attention.

“The start of 2018 has already seen a list of casualties, and with trading conditions unlikely to change in the short-term, retailers are increasingly having to be clear on their point of differentiation. It appears that unless you’re a grocer, bridging the gap between online and off-line sales offers the best means of success in this climate.”

Joanne Denney-Finch, Chief Executive, IGD

“Spring performance is often hard to judge, with varying Easter dates making for difficult year on year comparisons. The bad weather conditions businesses have faced this season add further complexity - April trading may give us a clearer picture.

“Despite this, UK grocery retailers reported growth last month. Price change continues to provide some support, but there are now signs that inflation is slackening, both in the grocery market and wider economy. This, coupled with rising wages, may encourage shoppers to spend more as the year progresses.

“For now, IGD’s most recent ShopperVista data suggests that most remain cautious about economic outcomes. Value-seeking behaviour is actually becoming more common, with 46 per cent of shoppers saying they always look for the cheapest products even if it takes time to find them (up from 40 per cent in March 2017).”