Easter and ‘The Beast’ give sales a roller-coaster ride
The Easter weekend offered a boost to retail sales in March, but the ‘Beast from the East’ dampened performance.
According to the BRC-KPMG Retail Sales Monitor, retail sales in the UK had a tumultuous time in March and only returned to growth due to strong food sales, following declines in January and February.
BRC chief executive Helen Dickinson commented: “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,” Ms Dickinson added. “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 promotion-driven activity bore the brunt of consumers’ disinterest in typical springtime purchases, as well as the ongoing spending squeeze on non-essentials.
The figures showed that overall UK retail sales increased by 1.4 per cent on a like-for-like basis in March, compared with a fall of one per cent a year earlier. On a total basis, sales rose by 2.3 per cent in March, against a decline of 0.2 per cent in March 2017.
This was higher than the three-month and 12-month averages of 1.8 per cent and 1.9 per cent respectively.
For the three months to March, non-food retail sales fell by 1.8 per cent on a like-for like basis and one per cent on a total basis.
In-store sales continued to dwindle, falling by three per cent on a total basis and four per cent on a like-for-like basis over the same three-month period.
Online continued to drive sales growth, with sales of non-food items rising by 7.9 per cent in March, compared with a growth of 6.6 per cent a year earlier.
The online penetration rate increased further from 20.6 per cent in March 2017 to 22 per cent in March 2018.
Ms Dickinson added: “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.”
However, a retail expert has argued that seasonal peaks and troughs and disruptive weather are only part of the picture and warned that retailers need to embrace digital innovations if they want to see success in a struggling retail environment.
“Shopping in-store is now very much experiential, and by bringing innovative new ways to shop, retailers can enhance that experience to make it more interactive, digitally enabled and help to boost their sales and loyalty base,” said Heather Barson, director of retail and hospitality at Fujitsu UK and Ireland. “If retailers want to see success, they cannot deny consumers’ desire for technology and need to embrace digital innovations. Retailers need to think about how they can apply this to their whole experience, from online, mobile, to in-store.”
“Technology is a powerful influence on where consumers shop – four in five would spend more in a shop with a better technology experience. Given the challenges in the current retail landscape, retailers need to think about how they can use technology in their stores to improve customer loyalty and revenues. In fact, we found 46 per cent of UK consumers believe AR will positively impact retail, with VR behind at 22 per cent However, only 50 per cent of retailers have a digital strategy to implement these technologies, which begs the question, where is the disconnect between what consumers are saying they want, and what retailers are giving them?”