UK Head of Retail Paul Martin comments on the retail sales below expectation performance 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. One way of correcting for this distortion is to look at the 2-year average, since the Easter effect was reversed last year, depressing sales in April 2018.
Paul Martin, Partner, UK Head of Retail | KPMG
“Retailers reaped the rewards of Easter and more favourable weather in April, with like for like sale up 3.7 per cent year-on-year. However, we must remain mindful of the distortion caused by Easter’s timing.
“Looking at sub-categories, food retailers were clear winners as families came together for festive feasts and even braved their first picnic or barbecue of the year.
“The long weekend also helped children’s toys and furniture sales, as parents looked to keep youngsters entertained as they returned to home and garden improvements.
“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.”
Helen Dickinson OBE, Chief Executive | British Retail Consortium
“Retail sales were below expectation this month as the sunshine over the Easter weekend persuaded many to pursue recreational, rather than retail, activities. Department stores, as well as clothing and footwear shops, were harder hit by the warmer weather, while food-to-go fared much better from it.
“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. Government should review these costs – and in particular reduce the burden of Business Rates – if they wish to see retail maintain its place as the main provider of highly valued, flexible jobs in communities up and down the country.“
Susan Barratt, CEO | Food & Drink sector performance | IGD
“Outstanding Easter weather helped to deliver a good month for food and grocery sales. Combining March and April, to iron out the shifting date of Easter, reveals 2.1 per cent sales growth compared with the same time last year, 3.2 per cent when including Food-to-go.
“The sales mix at Easter is evolving rapidly with 28 per cent of shoppers now seeking healthier alternatives to regular chocolate eggs, and for the main celebratory meal, chicken is now more popular than lamb amongst younger shoppers whereas 22 per cent of under 24s planned to serve at least one vegetarian or vegan course.”
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