Food retailers still appear to be best source of recyclable material

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Packaging from the food sector appear to be the most dominant source of recyclable material from the retail sector over the coming months.

As the latest data from the British Retail Consortium/KPMG Retail Sales Monitor for March shows, the food sector continues to grow while the non-food sector struggles.

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In March overall, UK retail sales increased by 1.4% on a like-for-like basis from March 2017, when they had decreased by 1.0% on the year before.

On a total basis, sales rose 2.3% in March, against a decline of 0.2% in March 2017.

This is above the 3-month and 12-month averages of 1.8% and 1.9% respectively, but it is positively distorted by the timing of Easter this year with school holidays and the beginning of the Easter weekend occurring at the end of March.

Over the three months to March, in-store sales of non-food items declined 3.0% on a total basis and 4.0% on a like-for-like basis. On a 12-month basis, the total decline was 2.2%.

But in the same period to March, food sales increased by 4.2% on a like-for-like basis and 5.3% on a total basis. This is the strongest three-month average since July 2009 and above the 12-month total average growth of 4.4%, which itself is the highest since March 2012.

Online sales of non-food products grew 7.9% in March, against a growth of 6.6% in March 2017. This is above the three-month and 12-month averages of 6.6% and 7.8% respectively.

British Retail Consortium chief executive Helen Dickinson said: “March paints a volatile picture for sales, which experienced peaks and troughs to deliver some modest growth on last year. The positive distortion from the timing of Easter pushed sales up by over 15 per cent during the holiday week compared with the rest of the month, only just making up for a sub-zero performance at the start of the month.

“There’s no doubt that the ‘Beast from the East’ and its successor played a significant role in deterring shoppers from making store visits. But it didn’t dampen consumers’ appetites towards food purchases, which saw the anticipated spike from the Easter festivities. This was in stark contrast to non-food sales which, despite some promotional- driven activity, bore the brunt of consumers’ disinterest in typical Springtime purchases, as well as the ongoing spending squeeze on non- essentials.

“There is hope that, with the gap between inflation and wage growth finally narrowing, consumers’ purse strings will slacken to some extent. But the grip on spending power will persist over the course of the year.

“So with the success of Brexit as the determinant of what we pay for products in 2021, the deal negotiated in the next six months needs to focus on reducing potential customs friction on the movement of goods between the UK and EU-27.”

KPMG head of retail Paul Martin said: “March was difficult for large parts of the UK retail industry. Seemingly endless cold weather dissuaded would-be shoppers from the high street and a number of retailers delivered bad news. Great hopes were placed on Easter trading, but while the latest figures point to overall improvement when compared to recent months, the Easter boost didn’t quite measure up to previous years.

“The divide between food and non-food sales became further pronounced, with food clearly the winner. This came at the expense of other categories, with few others noting growth.

“Retailers with an online presence were far more fortunate, with a marked lift in all categories. The cold weather clearly persuaded shoppers to peruse from the comfort of their own homes, with beauty and clothing grabbing the most attention.

“The start of 2018 has already seen a list of casualties, and with trading conditions unlikely to change in the short-term, retailers are increasingly having to be clear on their point of differentiation. It appears that unless you’re a grocer, bridging the gap between online and off-line sales offers the best means of success in this climate.”

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