Retail sales ‘below expectations’ in April
Written by Peter Walker
Retail sales increased by 4.1 per cent in April, against a decrease of 3.1 per cent during the same month last year, according to the latest British Retail Consortium (BRC) and KPMG figures.
However, last month’s statistics were positively distorted by the timing of the run-up to Easter, which was in April this year compared to March in the previous year. One way of correcting for this distortion is to look at the two-year average, since the Easter effect was reversed last year, depressing sales in April 2018.
This figure was 0.4 per cent per annum, a slowdown from March’s equivalent of 0.9 per cent.
Over the three months to April, in-store sales of non-food items declined 1.7 per cent on a total basis and 1.8 per cent on a like-for-like basis. Food sales increased 1.7 per cent on a like-for-like basis and 2.8 per cent on a total basis. Non-food retail sales in the UK decreased by 0.2 per cent on a like-for-like basis and by 0.1 per cent on a total basis.
Online sales of non-food products grew 4.3 per cent in April, against a growth of 6.7 per cent in April 2018. The two-year average growth was 5.5 per cent per annum, in line with March’s 5.4 per cent, but below the 12-month average of 6.2 per cent.
The online penetration rate increased from 28 per cent in April last year to 29.7 per cent last month.
BRC chief executive Helen Dickinson said retail sales were below expectation, as the sunshine over the Easter weekend persuaded many to pursue recreational, rather than retail, activities.
“Department stores, as well as clothing and footwear shops, were harder hit by the warmer weather, while food-to-go fared much better from it,” she stated. “Online accounted for a little under 30 per cent of all non-food sales, and we expect this proportion to continue to rise, nonetheless, the pace of growth has slowed over the course of the year despite the investment that many stores have made in their digital offering.”
Paul Martin, UK head of retail at KPMG, noted that when looking at sub-categories, food retailers were clear winners, as families came together for festive feasts and even braved their first picnic or barbecue of the year.
“April may have eased the strain on retailers somewhat, but we can’t overlook the fact that the new tax year also presents retailers with additional costs ranging from increased minimum wages to additional pension contributions,” he continued, adding: “The task of balancing sales and a profitable margin remains crucial, especially given the widespread promotional activity currently.”