Varying views on the state of UK retail
Retail sales figures released by both the BRC-KPMG and BDO this week have painted a varying picture of the state of retail this summer.
According to BDO which released its High Street Sales Track this week August saw the worst month for like for like sales in the past two years. It said sales for mid-market retailers year on year were down by 2.2 per cent with dips across all sectors but most evident in fashion and homeware sales which both fell by 2.4 per cent. Non fashion sales slipped by 1.8 per cent.
However the BRC, in its own measure, the BRC-KPMG Retail Sales Monitor, said sales values were 0.6 per cent lower on a like for like basis compared to August 2010 when sales had risen 1 per cent. Footwear and homewares showed the largest declines it said. Non food saw one of the worst monthly results of the year so far with only toiletries, cosmetics and menswear showing growth.
The poor performance of August was down to various factors including the wet weather and weak consumer confidence however the effect of the riots was disputed.
The BRC said the riots were not widespread or prolonged enough to have had a significant impact on the UK wide figure while BDO believed they were a major cause with early store closures and the effects of the riot hitting shopping patterns.
Stephen Robertson, Director General of the BRC said: “The retail sector’s performance for August has been essentially flat. The riots were not widespread or prolonged enough to have a significant impact on these UK-wide figures."
"Poor consumer confidence, high inflation and the on-going squeeze on personal finances remain the biggest threats to the retail sector. Sales of big-ticket items are very dependent on discounting and many retailers' margins are being cut to the bone," he said.
The news follow similarly pessimistic figures from the CBI’s quarterly Distributive Trades Survey last week which showed that retailer sales volumes fell in August at their fastest pace for over a year.
However Don Williams, National Head of Retail and Wholesale at BDO said the August sales were compared against a strong August last year and that while the pressure on customers is unlikely to let up retailers shouldn’t lose hope completely.
“Retailers should bear in mind the British consumer has consistently shown itself to be a resilient create and shoppers should start to return to retailers who give them great products, prices and service. Volumes will remain subdued over the next couple of months but the overall level of spend should hold,” he said.