March Sun Warms Retail Sales

Michelle Remo, “Big 4″ observer
April 11, 2012 /

UK retail sales values were up 1.3% on a like-for-like basis from March 2011, when they were down 3.5% on a year ago. On a total basis, sales were up 3.6%, against a 1.9% decline in March 2011.

Food sales growth was unchanged from February but non-food sales growth improved. March’s unusually warm sunny weather helped clothing, footwear and outdoor leisure. Indoor homewares remained down on a year ago, with larger purchases in particular hit by consumer caution.

Online (including mail-order and phone) sales of non-food items showed stronger growth, but against a very weak March 2011. Sales were 13.9% up on a year ago, the best since December 2011.

The changing timing of Easter always makes analysis difficult in March and April. Easter fell in April 2011 but in March in 2010, meaning March last year looks exceptionally weak.

Stephen Robertson, Director General, British Retail Consortium, said: “The unusually warm weather in March brought some welcome sunshine into the lives of non-food retailers. The early signs of summer got people buying clothes and shoes for the new season. Gardening items and outdoor leisure also saw a lift.

“It’s worth remembering the sales comparison is against the weakest month of last year, largely caused by the movement of Easter in the calendar, and we’ll have to see whether this is additional spending or just shopping which has happened earlier than usual. Food sales growth continues to be largely underpinned by food inflation rather than by customers buying more.

“The overall retail environment is still difficult. Discounting remains a key tactic for retailers trying to encourage consumers to spend, particularly on big indoor items. People are still struggling to balance household budgets against expensive fuel and utilities. The warmth of March was a help but it will take more than a week of sunshine to transform retailers’ fortunes.”

Helen Dickinson, Head of Retail, KPMG, said: “The clothing sector as a whole and non-food generally benefited from the warm March weather. But, as consumers’ incomes continue to be squeezed, it’s female shoppers who are tightening their purse strings most severely, focusing more on lower price point items to control the household budget. This buying behaviour saw women’s clothing perform less strongly than men’s and childrenswear. Home accessories and textiles also had a poor month.

“Increases in food prices rather than volumes was one of the factors behind the uplift in this month’s figures. Rising petrol prices continued to drive up transport and manufacturing costs, causing food prices to increase each month since the start of the year. “Retailers will be hoping Easter provides a much needed boost but many are not holding their breath and continue to focus on controlling margins and costs.”

Food & Drink

Joanne Denney-Finch, Chief Executive, IGD, said: “Mothering Sunday provided a mid-month boost to food and grocery sales in March. Easter now marks the start of a unique succession of events in the coming months, including the Diamond Jubilee and Olympics. The British love a reason to celebrate and our ShopperVista research shows many shoppers enjoy themed promotions and in-store activities.

“While shoppers remain sensitive to inflationary pressures, such events present great short-term opportunities. During last year’s Royal Wedding, we observed shoppers were more interested in a range of foods, including higher quality lines and organic groceries as well as locally sourced or British goods.”

Online (Non-Food)

Stephen Robertson, Director General, British Retail Consortium, said: “Online retail benefited from the warmer weather in March in much the same way as store sales, with people keen to buy clothes, footwear and garden furniture. That helped sales grow 13.9 per cent compared with the same month a year ago, the best online performance since December.

“Again, March 2011 was weak because of the movement of Easter which flatters this year’s figures. Online retail continues to expand but the rate of growth is well behind the peaks of previous years. Sales are increasingly dependent on promotions and offers which are eating into margins.”

The BRC-KPMG Retail Sales Monitor measures changes in the actual value (including VAT*) of retail sales, excluding automotive fuel. The Monitor measures the value of spending and hence does not adjust for price or VAT changes. If prices are rising, sales volumes will increase by less than sales values. In times of price deflation, sales volumes will increase by more than sales values.

 

Share your opinion