Improved Sales Figures Not Good Enough, Warns KPMG
The latest Retail Sales figures from the Office for National Statistics look good and indeed the retail sector had a much stronger end to the first quarter, says Helen Dickinson, head of retail at KPMG.
“However, they need to be interpreted with caution – particularly as the ONS figures have been open to challenge over recent months,” Dickinson added.
“They continue to show some anomalies not reflective of the underlying reality of the structural change ongoing in the sector. For example the ONS figures suggest smaller stores with 10 to 99 employees are growing sales by between 12 to 19.6 per cent in value terms, but the reality is that independent retailers are being hit the hardest by the current challenging environment, as the store vacancy rates at about 15 per cent shows.
“The headline growth figure of 5.7 per cent was boosted by fuel sales, where consumers both stocked up given the threat of the tanker driver strike and had higher prices to contend with. When considering retail sector performance, it makes more sense to exclude fuel sales. Based on the ONS data the value of retail sales, excluding fuel, increased by 4.9 per cent in March 2012 over March 2011. Non-food had a much better month with clothing benefitting from the warm weather, which last year occurred in April rather than March, whereas food volumes fell.
“Most retailers are not expecting March’s performance to be indicative of a change in fortune and continue to focus on maintaining and improving profitability, which is a goal that is becoming harder and harder to achieve.”