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Online sales grow their share of the market, while overall retail sales fall: BRC

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Online sales grew in April, though more slowly than the longer-term trend
Online sales grew in April, though more slowly than the longer-term trend

Online sales growth slowed in April, at the same time as a greater proportion of UK retail sales took place online, new data suggests.

 

Ecommerce sales of non-food products rose by 6.7% during the month, according to the BRC-KPMG Retail Sales Monitor for April 2018 – below both the three month average of 7.1% growth and the 12 month trend of 7.5% growth. A higher proportion (22%) of all retail sales took place online than a year earlier (20.8%).

 

But at the same time overall UK retail sales fell. Sales across all channels were down by 3.1% compared to last April, and by 4.2% on a like-for-like (LFL) basis, which strips out the effect of store openings and closures. Last April, sales rose by 6.3% in total, and by 5.6% LFL.

 

Helen Dickinson, chief executive of the British Retail Consortium (BRC) said the fall in overall sales was "almost inevitable" given the earlier Easter, which this year fell in March. "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."

 

While food sales grew by 3% in total (+1.7% LFL) in the three months to April, non-food sales fell by 1.6% in total (-2.4% LFL). That’s the lowest decline since March 2009 and is below the 12 month average fall of 0.6%, itself the lowest rate since September 2009.

 

Dickinson said: "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."

 

Paul Martin, head of retail at KPMG, said: "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.”

 

Image: Fotolia

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