Retail Sales Monitor for the month of November 2018 - KPMG United Kingdom
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BRC-KPMG Retail Sales Monitor for the month of November 2018

Retail Sales Monitor for the month of November 2018

FURTHER SALES SLOWDOWN IN NOVEMBER

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Covering the four weeks 28 October – 24 November 2018

 


- In November, UK retail sales decreased by 0.5% on a like-for-like basis from November 2017, when they had increased 0.6% from the preceding year.

- On a total basis, sales increased 0.5% in November, against an increase of 1.5% in November 2017. This is the lowest growth since April and below the 3-month and 12-month averages of 0.8% and 1.3% respectively.

- Over the three months to November, In-store sales of Non-Food items declined 1.9% on a Total basis and 3.3% on a Like-for-like basis. This is above the 12-month Total average decline of 2.3%.

- Over the three months to November, Food sales increased 0.8% on a like-for-like basis and 1.8% on a total basis. This is below the 12-month Total average growth of 3.3%, which is the lowest since October 2017.

- Over the three-months to November, Non-Food retail sales in the UK decreased 1.0% on a like-for-like basis and remained flat on a Total basis. This is above the 12-month Total average decrease of 0.2%. November Non-Food sales experienced a decline.

- Online sales of Non-Food products grew 2.9% in November, the lowest growth on record, against a growth of 6.5% in November 2017. This is below the 3-month and 12-month averages of 5.3% and 7.1% respectively. Online penetration rate increased from 32.6% last year to 33.8% in November 2018, an all-time high.


 

Helen Dickinson OBE, Chief Executive, British Retail Consortium

 

“This month cemented Black Friday as an increasingly digital event, with a record one-in-every-three-pounds of non-food purchases made online during the month. Black Friday week itself was bigger than last year, but did little to lift the overall pace of spending, with sales growth in November falling to its lowest rate in seven months.

 

“Weak consumer demand and falling confidence mean that retailers are in for a nerve-wracking run up to Christmas. Conditions in the industry have been particularly tough since the vote to leave the EU in 2016 and the current uncertainty has only compounded the challenges. Only when the UK secures a transition period with the EU that ensures tariff-free, frictionless trade will retailers be able to breathe a sigh of relief. “

 

Sue Richardson, Retail Director, KPMG

 

“Aggressive promotional activity around Black Friday failed to lure shoppers, with like-for-like sales in November actually down 0.5 per cent on last year. The benefit of the full weekend, including Cyber Monday, won’t be realised until next month, but it’s clear that growth remains elusive for many retailers.

 

“Demand for the latest tech – whether that be driven by deals or new releases – did provide some relief from this bleak picture in which even grocery sales were fairly stagnant as food price inflation eased.

 

“As we’ve come to expect, online sales did fare better but when compared to the previous year’s growth, the performance wasn’t stellar.

 

“Sales growth and profitability don’t necessarily go hand-in-hand, especially against a backdrop of deep discounting, so in this environment a laser-like focus on margin and cost base is absolutely essential.”

 

Jon Woolven, Strategy and Innovation Director, IGD

 

“Black Friday delivers few favours for food and grocery retailers, diverting attention elsewhere. This contributed to lukewarm grocery sales in November, even though 68 per cent of shoppers say they have already begun their Christmas food shopping.

 

“However, the long term trend is to leave most of this until as late as possible, so hopes remain for a strong finish to what has been a good year overall for the grocery sector.”

 

- ENDS -

 

For Media Enquiries:

 

Simon Wilson PR Assistant Manager, KPMG
T             0207 311 6651

M            07785 373397

E             simon.wilson@kpmg.co.uk

 

Tom Holder Media Relations Officer, BRC

T           0207 854 8924

M          07772382432

E           tom.holder@brc.org.uk

 

Alexandra Crisp Senior Communications Officer, IGD
T             01923 857141

M            07590 183295

E             Alexandra.Crisp@igd.com

 

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.

Retailers report the value of their sales for the current period and the equivalent period a year ago. These  figures are reported both in total and on a ‘like-for-like’ basis.

Total sales growth is the percentage change in the value of all sales compared to the same period a year earlier. The total sales measure is used to assess market level trends in retail sales. It is a guide to the growth of the whole retail industry, or how much consumers in total are spending in retail – retail spending represents approximately one-third of consumer spending. It is this measure that is often used by economists. Many retailers include distance sales as a component of total sales.

‘Like-for-like’ sales growth (LFL) is the percentage change in the value of comparable sales compared to the same period a year earlier. It excludes any spending in stores that opened or closed in the intervening year, thus stripping out the effect on sales of changes in floorspace. Many retailers include distance sales as a component of like-for-like comparable sales.

The like-for-like measure is often used by retailers, the city and analysts to assess the performance of individual companies, retail sectors and the industry overall, without the distorting effect of changes in floorspace.

Online (including mail order and phone) sales of non-food are transactions which take place over the internet, or via mail order or phone. Online sales growth is the percentage change in the value of online sales compared to those in the same period a year earlier. It is a guide to the growth of sales made by these non-store channels. It should be noted that online sales are still a small proportion of total UK retail sales. Estimates based on ONS figures show about 10 per cent of total UK retail sales (food and non-food) are achieved via the internet.

The responses provided by retailers within each sales category are weighted (based on weightings derived from the ONS Family Spending survey) to reflect the contribution of each category to total retail sales, thus making it representative of UK retail sales as a whole. Because the figures compare sales this month with the comparable period last year, a seasonal adjustment is not made. However, changes in the timing of Bank Holidays and Easter can create distortions, which should be considered in the interpretation of the data.

As well as receiving sales value direct from the retailers in the scheme the BRC-KPMG Retail Sales Monitor also receives food and drink sales value data from the IGD’s Market Track Scheme.

In its role as sponsor of the BRC-KPMG Retail Sales Monitor, KPMG is responsible for the aggregation of the retail sales data provided by the retailers on a weekly basis. This data consists of the relevant current week’s sales data and comparative sales figures for the same period in the prior year. The aggregation has been performed by KPMG on data for periods following 2 April 2000 and equivalent prior periods. The accuracy of the data is entirely the responsibility of the retailers providing it. The sponsorship role has been performed by KPMG since 10 April 2000 and the same for the aggregation of omparative sales figures for the period from 2 April 2000 it is not responsible for the aggregation of any data included in this Monitor relating to any period prior to 2 April 2000.

The commentary from KPMG is intended to be of general interest to readers but is not advice or a recommendation and should not be relied upon without first taking professional advice. Anyone choosing to rely on it does so at his or her own risk. To the fullest extent permitted by law, KPMG will accept no responsibility or liability in connection with its sponsorship of the Monitor and its aggregation work to any party other than the BRC. 

 

About KPMG in the UK

KPMG LLP, a UK limited liability partnership, operates from 22 offices across the UK with approximately 14,500 partners and staff.  The UK firm recorded a revenue of £2.2 billion in the year ended 30 September 2017. KPMG is a global network of professional firms providing Audit, Tax, and Advisory services. It operates in 154 countries and territories and has 200,000 people working in member firms around the world. The independent member firms of the KPMG network are affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity.  Each KPMG firm is a legally distinct and separate entity and describes itself as such.

© 2019 KPMG IFRG Limited is a UK company, limited by guarantee. All rights reserved. KPMG IFRG Limited, registered in England No 5253019. Registered office: 15 Canada Square, London, E14 5GL, UK.

KPMG International Cooperative (“KPMG International”) is a Swiss entity.  Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm.

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