Retail sales “below expectation” in April

The April figures are positively distorted by the timing of the run-up to Easter, which is in April this year compared to March in the previous year.

According to the latest BRC-KPMG retail sales monitor, on a total basis, sales increased by 4.1 per cent in April, and this was above both the three-month and 12-month average increases of 1.2 per cent and 1.4 per cent respectively.

For the period covering the four weeks 31 March – 27 April 2019, UK retail sales increased by 3.7 per cent on a like-for-like basis from April last year. The two-year average like-for-like change was -0.3 per cent per annum, a slowdown from March’s 0.1 per cent and February’s 0.3 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.

In addition, while online sales of non-food products grew by 6.7 per cent in April 2018, this year, growth was recorded at only 4.3 per cent for April.

The BRC (British Retail Consortium) reported that household appliances was one of the worst performing categories last month, ranking 11th out of 13 categories. In March this year, it came in eighth place and in April last year total sales in household appliances were very good – it was ranked the fourth best sector.

Likewise, online sales growth in household appliances was down in April this year, ranked nine out of 10 online categories.

Helen Dickinson OBE, Chief Executive, British Retail Consortium, said: “Retail sales were below expectation this month as the sunshine over the Easter weekend persuaded many to pursue recreational, rather than retail, activities.

“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.

“Retailers are continuing to invest in technology across both physical and online activities as they seek to meet changing consumer behaviours, however some of such spending is being held back by the plethora of Government-imposed business costs bearing down on the industry.”

Paul Martin, Partner, UK Head of Retail at KPMG added, “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. The task of balancing sales and a profitable margin remains crucial, especially given the widespread promotional activity currently.”