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Brexit uncertainty sees sales slow online and offline in March, while the longer-term shift towards online continues: BRC

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Brexit uncertainty sees sales slow online and offline in March, while the longer-term shift towards online continues: BRC

Retail sales slowed in March as Brexit uncertainty deepened during the month, while at the same time shoppers continued their longer-term shift from buying in-store to online, British Retail Consortium (BRC) figures suggest.

 

Some 29.9% of retail sales took place over the internet during March, according to the latest BRC-KPMG Retail Sales Monitor for the month. That’s up from 28.5% a year earlier.

In-store sales, measured over the three months to March, were down by 1.5% in total, and by 1.7% on a like-for-like basis. Over the lower term, total average in-store sales declined by 2.1% over the last 12 months. Online sales grew by 4.5% over the three months to March, and by 6.4% over the last 12 months.

 

Helen Dickinson, chief executive of the BRC, said: “Retail sales slowed in March, even when the Easter distortions were accounted for, as greater uncertainty caused people to hold off from splashing out. While jewellery, beauty proudest and clothing purchases were all up to indulge on Mother’s Day, shoppers were generally cautious not to overspend, particularly on larger items.

 

“Brexit continues to feed the uncertainty among consumers. For the sake of everyone, MPs must rally behind a plan of action that avoids no deal – and quickly – or it will be ordinary families who suffer as a result of higher prices and less choice on the shelves.”

 

The later timing of Easter in 2019 - the holiday falls in April this year, whereas last year it was in March – distorted sales in March, said the BRC, which has calculated two-year average figures as well as producing figures for March in order to understand the general direction of growth.

 

Online sales of non-food products grew by 3% in March, against growth of 7.9% in March 2018. The two-year average figure was 5.4%, down from 5.9% in February.

 

Meanwhile, total sales for the month – across all sales channels – fell by 0.5% in March. A year earlier they had risen by 2.3%. The two-year average growth was 0.9% a year. When measured on a like-for-like basis, which strips out the effect of store – and business – openings and closures, retail sales fell by 1.1%. A year earlier they had risen by 1.4%. The two-year average growth was 0.1%, down from 0.3% in February.

 

Sue Richardson, retail director UK at KPMG, said: “March marked a truly disappointing end to the first quarter of 2019 for retailers, Not only did total sales fall 0.5% compared to the same month last year, but no further clarity around Brexit came to light and shoppers continue waiver.


“Not all categories or channels suffered the same fate though, with clothing generally bagging a welcome reprieve thanks to more favourable weather – especially when compared to the Beast from the East this time last year.

 

“However other categories, mainly big-ticket items including furniture, remained overlooked. Online sales may have performed better than the high street, but the high proportion of sales occurring online actually nods towards the underlying issue of profit pressure. Retailers will be hoping for an end to this sustained uncertainty - it’s clearly not good for business – but times have well and truly changed, and agility remains the best form of defence.”

 

Food sales grew by 1.3% in total, and by 0.2% LFL, in the three months to March - below the total average growth of 2% over the last 12 months.

 

Susan Barratt, chief executive of food and drink analyst the IGD, said the late Easter was the main factor behind year-on-year falls in grocery sales during the month. “The underlying trend has been generally flat, indicating there has not been stock building by households,” she said.

 

image: Fotolia

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