Easter impacts on UK non-food retail sales – will arisings be lower?

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It appears that the Easter half-term took its toll on non-food retail sales during April 2018, with this likely to mean there could be less material around for recyclers if this trend continues.  

According to the latest data from the British Retail Consortium/KPMG Retail Sales Monitor for April, findings show that the food sector continues to increase, while the non-food sector struggles. 

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Last month, UK retail sales decreased by 4.2% on a like-for-like basis from April 2017, when they had increased by 5.6% on the previous year. 

On a total basis, sales declined by 3.1% in April, against an increase of 6.3% in April 2017, both distorted by the timing of Easter. 

This is below the 3-month and 12-month averages of 0.4% and 1.2%, and the sharpest decline ever recorded by the survey since January 1995. 

Over the three months to April, in-store sales of non-food items declined by 3.8% on a total basis and 4.9% on a like-for-like basis. On a 12-month basis, the total decline was 2.9%. Both a record low.  

During the same period, food sales increased by 1.7% on a like-for-like basis and 5.3% on a total basis. This is below the 12-month total average growth of 2.5%, suggesting that growth has peaked, since inflation started to recede. 

However, during the same timeframe, non-food retail sales in the UK fell by 2.4% on a like-for-like basis and 1.6% on a total basis, the the lowest since March 2009, and below the 12-month total average decrease of 0.6%, the lowest since September 2009.  

Online sales of non-food products grew 6.7% in April, against a growth of 10.3% in April 2017. This is below the 3-month and 12-month average of 7.1% and 7.5% respectively.

British Retail Consortium chief executive Helen Dickinson said: “A drop in sales this April, compared to last, was almost inevitable given the earlier timing of Easter. With much of the spending in preparation for the Bank Holiday weekend falling in March this year, a record low in sales growth, in contrast to last year’s record high, does not come as a surprise. However, even once we take account of these seasonal distortions, the underlying trend in sales growth is heading downwards. 

“The first glimpse of summer may have temporarily lifted clothing and footwear, but non-food sales overall continue to be weak. Consumers’ discretionary spending power remains under pressure and the reality is, that with only a gradual return to solid growth in real incomes expected, the market environment is likely to remain extremely challenging for most retailers. 

“The retail industry is undergoing an unprecedented period of change the impact of which is being laid bare for us all to see across the nation’s high streets. Retailers are reacting to this change to ensure it represents a positive reinvention of our industry, investing in technology and innovation and providing digital training to employees to improve the customer experience.” 

KPMG head of retail Paul Martin said: “April’s figures show retail sales growth falling off a cliff, with sales down -3.1 per cent on last year, but we must exercise caution and remember that the timing of Easter makes meaningful month-on-month comparisons difficult. That said, the three-month average is more helpful to assess, but this too points to sales only growing modestly – these are indeed testing times for retailers! 

“April saw all seasons rolled into one, from a dreary and wet Easter to more welcome sunny spells. Fashion sales received a much-needed boost, but otherwise the sales were disappointing for the rest of the high street. 

“Online retail once again bucked the overall trend, with growth in all categories except toys and baby equipment. Like the high street, it was clothing and footwear that benefitted most. 

“Retailers have got their work cut out to overcome seemingly endless obstacles, whether it be unpredictable weather or the introduction of new regulation, like GDPR. The upcoming months will provide a number of opportunities for retailers to drive sales and navigate this assault course, including Bank holidays, World Cup and of course the Royal wedding, although it is clear that trading will remain challenging.” KPM

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