April's BRC-KPMG Retail Sales Monitor shows decline in retail sales

UK retail sales values were down 2.2% on a like-for-like basis from April 2012, when they had declined 3.3% on the preceding year. On a total basis, sales were down 0.6%, against a 1.0% decline in April 2012.

Growth was negatively impacted by the timing of Easter, which fell in April last year but in March this year. The 3-month total growth average, which irons out the Easter distortions, was 2.6%. It remained above the long-term 12-month average, which continued on an uptrend to reach 2.5%.

Adjusted for Shop Price Index inflation at 0.4% in April, total retail sales declined 1.0% in real terms while the 3-month average showed growth of 1.6%.

Online sales were up 8.3% compared with April 2012, when they had risen by 9.0%.

Helen Dickinson, Director General, British Retail Consortium, said: "On the surface these are really poor figures but they're hiding another respectable month. The fact that the boost from Easter didn't fall in April this year hit food sales in particular. But, taking away the Easter distortion, this was actually a better month than March, especially for non-food sales.

"Wintry weather, followed by the arrival of sun, had a big influence on some retailers. Fashion sales were weak early in the month but that was almost entirely made up later when signs of spring arrived. While health and beauty gained both ways with strong sales of cold and flu remedies and then of bronzing and skin care products.

"There's a sense that people are more prepared to spend than they were but Chief Executives are telling me that's volatile. A convincing trend towards revival is hard to spot and competitive pricing is still critical to generating sales, despite the effect on margins and on retailers' ability to invest in offering customers new ways to shop.

"Essentially, so far this year, sales growth is a small and tentative step up on where it was in 2012 but when it will take the next step is not clear."

David McCorquodale, Head of Retail, KPMG, said "This was always going to be a tricky month. As predicted, April's sales have been negatively affected by Easter falling in March this year and so statistically the figures, with like-for-like sales down 2.2 per cent, look depressing when compared with last year's rain soaked April.

"However, taking the three month weighted average, which smooths out the effect of the timing of Easter, the total increase in retail sales was 2.6 per cent. That's above the three-month Shop Price Index at 1.0 per cent. This is a positive result and shows that, despite the cold weather of the last few months, the health of the retail sector is holding up and may be on a positive trajectory. It is yet to be seen at what margins these sales are being achieved and what is the cost of fulfilling the online demand, but retailers will be heartened by this momentum.

"Home accessories and household textile sales tapered off in April after a strong showing in March and, whilst footwear and fashion sales continued to struggle early in the month with winter's bite continuing, the arrival of spring delivered some light relief for the fashion sector. We hope for more good weather and good news over May and June as retailers, particularly in garden and fashion, will look for a strong performance after last year's early summer deluge."

Source : Helen Dickinson - Director General, BRC
www.brc.org.uk/brc_news_detail.asp?id=2433