Essential reading for retailers and suppliers in the home improvement market

Retail sales see worst decline on record

Published: 4 June 2019 - Kiran Grewal

Retail statistics covering the four weeks 28 April – 25 May 2019 from the British Retail Consortium (BRC) and the KPMG retail sales monitor show that on a total basis, sales decreased by 2.7% in May. Excluding Easter distortions, this is the worst decline since this record began in January 1995. However, this was against an increase of 4.1% in May 2018, itself a four year record. This decline drags the three month and 12 month average increases down to 0.2% and 0.9% respectively. 

UK retail sales decreased by 3.0% on a Like-for-like basis from May 2018, when they had increased 2.8% from the preceding year. This was the steepest Like-for-like decline since December 2008, excluding Easter distortions.

 

Over the three months to May, In-store sales of Non-Food items declined 2.7% on both a Total and Like-for-like basis. This is worse than the 12-month Total average decline of 2.4%. Over the three-months to May, Non-Food retail sales in the UK decreased by 1.1% both on a like-for-like and on a Total basis. This is below the 12-month Total average decrease of 0.4%. Online sales of Non-Food products grew 1.5% in May, an all-time low, against a growth of 11.5% in May 2018. The three month and 12 month average growths were 2.9% and 5.4%. Non-Food Online penetration rate increased from 28.2% in May 2018 to 30.3% last month.

Chief executive of the British Retail Consortium, Helen Dickinson OBE, commented: “With the biggest decline in retail sales on record, the risk of further job losses and store closures will only increase. While May 2018 offered almost unbroken sunshine, topped off by the run up to the World Cup and the marriage of Meghan and Harry, May 2019 delivered political and economic uncertainty. Food sales dropped for the first time since June 2016, with further declines in clothing, footwear and outdoor goods.

“With retail conditions the toughest they have been for a decade, politicians must act to support the successful reinvention of our high streets and local communities. Business rates remain a barrier, preventing many retailers from investing in their physical space. We have a broken tax system, which sees retailers paying vast sums of money regardless of whether they make a penny at the till, and yet the Government is failing to act. The legislation is falling behind the technological revolution.”

UK head of retail of KPMG, Paul Martin said: “April may have provided retailers with some light reprieve thanks to Easter, but May’s staggering fall of 3% like-for-like is a stark reminder of the industry’s ongoing issues, which for many require urgent attention.

“We are of course comparing this month’s growth against a stellar May in 2018, but even the three month average - which softens the monthly volatility - demonstrates that achieving growth in retail remains a real struggle.

“The bank holiday weekends have given rise to the added interest in furniture and homewares, as shoppers set about making home improvements. However, the weather did little to convince fashion-minded shoppers to refresh their seasonal wardrobes.

“The extremely low growth online is real cause for concern, especially with almost a third of all non-food sales today being made online. This trend has continued to manifest itself over the last year and requires real focus from the retail community.”

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