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Industry News

Published on May 9th, 2018 | by The GC Team

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Retail sales growth “falling off a cliff”

UK retail sales during April recorded a marked decline due to the timing of Easter this year, but the underlying trend is of concern to the sector as it reflects an overall downturn.

The BRC today reported a fall of 3.1% on a total basis, with like-for-like figures down 4.2% on April 2017.

This is below the 3-month and 12-month averages of 1.2% and 0.4% respectively, and the sharpest decline recorded since the monitor’s inception in January 1995.

Over the three months to April, in-store sales of non-food items declined 3.8% on a total basis and 4.9% on a like-for-like basis, setting a record low since this measure began in January 2013. On a 12-month basis, the total decline was 2.9%, another record low.

Online sales of non-food products did, however, record growth, up 6.7% in April, but this is below the 3-month and 12-month averages of 7.1% and 7.5% respectively.

The online penetration rate rose from 20.8% in April 2017 to 22.0% in April 2018.

Paul Martin, Head of Retail at KPMG, said: “April’s figures show retail sales growth falling off a cliff, with sales down 3.1 per cent on last year, but we must exercise caution and remember that the timing of Easter makes meaningful month-on-month comparisons difficult.

“That said, the three-month average is more helpful to assess, but this too points to sales only growing modestly – these are indeed testing times for retailers.”

Chief Executive of the British Retail Consortium Helen Dickinson OBE said: “The retail industry is undergoing an unprecedented period of change, the impact of which is being laid bare for us all to see across the nation’s high streets.

“A drop in sales this April, compared to last, was almost inevitable given the earlier timing of Easter. With much of the spending in preparation for the Bank Holiday weekend falling in March this year, a record low in sales growth in contrast to last year’s record high, does not come as a surprise. However, even once we take account of these seasonal distortions, the underlying trend in sales growth is heading downwards.

“Consumers’ discretionary spending power remains under pressure and the reality is that with only a gradual return to solid growth in real incomes expected, the market environment is likely to remain extremely challenging for most retailers.”

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