Strong sales growth but Easter driven

13 April 2010

UK retail sales values rose 4.4% on a like-for-like basis from March 2009, when sales had dropped 1.2%. Good Friday and Easter Saturday falling in the March trading period this year but in April 2009 boosted the year-on-year comparison. On a total basis, sales rose 6.6% against only 0.6% growth in March 2009.

- Food sales were boosted by Easter purchasing falling in March this year but April last year. For non-food, consumer caution in the face of economic and political uncertainty favoured essentials and replacements over discretionary items. Clothing and footwear slowed but homewares improved, helped by mid-season sales and promotions.

- Non-food non-store sales (internet, mail-order and phone sales) in March were 15.9% higher than a year ago compared with 15.5% in February. Sales were mixed and often discount and promotion driven.

Stephen Robertson, Director General, British Retail Consortium, said: “These are strong figures – the best total sales growth since April 2006, but they would have been only half as good without the distorting effect of Easter.

“Food sales received a big boost from Easter falling a week earlier than last year, with the first half of the Bank Holiday weekend reflected in these March results. The overall figures were also helped by the comparison with last year’s very weak performance.

“In food and drink, this was the most intense March for eight years for promotional activity. Non-food is also a competitive battleground as retailers fight it out to entice customers being put off spending by pre-election uncertainty.”

Helen Dickinson, Head of Retail, KPMG, said: "The timing of the majority of Easter spending, falling into the March 2010 period but in April last year, has boosted this month’s figures and makes year-on-year comparisons difficult. Without this uplift a gloomier picture would have emerged – concern about the future continues to weigh on consumers’ minds and the outlook for spending remains uncertain. Retailers are fighting hard to encourage shoppers and offer value, which has slowed the rise in shop prices over the month, but how long they will be able to sustain this, given the pressure on margins, is debatable. Women’s clothing and footwear were the worst performers due to the ongoing cold spell and comparisons with a sunny start to spring in 2009."

Food & Drink – Joanne Denney-Finch, Chief Executive, IGD, said: “Shoppers gave food retailers an Easter boost as they pushed the boat out in spite of – or, perhaps, because of – continuing economic and political uncertainty in March.

“Slow trading at the beginning of the month suggests that shoppers tightened their belts, although slowing food inflation will have affected year-on-year comparisons. Trading picked up in the second part of the month, as the Easter holiday approached.

“In addition to spending on chocolate eggs, IGD’s consumer research shows that around two-fifths of shoppers change their family meal at Easter and do something special or different. The retailers fought hard for this custom through targeted promotions and marketing.”

Non-Food Non-Store* - Stephen Robertson, Director General, British Retail Consortium, said: “This is good growth – the best since December and like store sales of non-food goods, online sales growth is improving. Online sales growth is well up on last March, though often discount and promotion driven. While customers are still nervous, they’re more willing to spend than a year ago when we were still mired in recession.

“Non-store retailing is consistently achieving double-digit growth, and slowly taking a bigger share of overall retailing, but still only represents six per cent of all retail sales.”

Food & Drink
Food sales growth picked up strongly towards the end of the month, helped by Good Friday and Easter Saturday falling in the March trading period this year but in April last year. Traditional areas of Easter spending such as confectionery and gift foods, roasting joints and fresh fish all did well. But in the face of economic and political uncertainties and a return to more cautious spending, there were many promotions and attractive deals to tempt price-conscious shoppers.

Clothing
Sales slowed sharply after February’s boost, when people had got out to the shops after the snow. Growth in men’s and children’s fell back and women’s sales were slightly lower than a year ago. Cold wet weather against a warmer, sunnier March 2009 helped to clear the last of the autumn/winter clothing – though often at the expense of margins – but gave a mixed start to spring/summer lines. Transitional ranges such as lighter jerseywear, tops, shirts and leggings were brighter spots. Several mid-season sales and special events helped, but the poor weather and uncertain prospects for incomes meant customers often preferred to delay discretionary purchases and concentrated on core essentials. Handbags and jewellery benefited from Mothering Sunday as well as accessorising rather than making larger purchases.

Footwear
Overall sales were slower than in February, the weakest growth since last September, as women’s sales dropped to just above their year-earlier level. Children’s held up and men’s slightly better than in February, though for both, the gains were against declines in March 2009. Colder, wetter weather than last March gave a slow start to spring/summer footwear, but did help to clear winter boots and shoes, albeit at discounted prices. Promotions and mid-season sales helped to tempt cautious shoppers but in general, people put off buying sandals and preferred casual shoes such as ballerina pumps and shoe boots, especially those suitable for different types of occasions.

Electrical and Electronic
It was another challenging month for most. In the uncertain climate for both personal finances and the economy, people held off buying discretionary items and concentrated on essentials and replacements. Shoppers actively sought out good deals and bought into promotions. Consumer caution hit larger items while smaller appliances, especially the more practical kitchen and cleaning products, did better. White goods held up, though were driven largely by replacement purchases. Brown goods, computers and digital imaging were mixed and often promotion-led.

Department Stores
It was a better month for most. The cold wet weather drove footfall, particularly in the run-up to Easter. Several mid-season sales and promotions attracted shoppers and in-store restaurants benefited. Clothing and footwear was mixed, with a slow start to new season ranges for some. Beauty products benefited from Mothers’ Day. Homewares held up, though were mixed both across stores and sectors.

DIY/Gardening
Trade picked up later in the month as the weather improved and Easter promotions attracted shoppers. Decorating, outdoor DIY and trade building improved. Gardening was still slow, especially against last March’s warmer weather. Plants and cut flowers were popular for Mothering Sunday and Easter.

Homewares
Home accessories slowed after a good February, while house textiles showed further good gains, though against a sizeable decline last March. Promotions and discounts helped to attract price-conscious consumers uncertain about future spending power. Hence practical kitchen and cooking products often took priority over discretionary and decorative extras.

Furniture and Floorcoverings
Sales growth rose to its strongest since September 2009, but the gain was against a very sharp drop in March 2009. Deliveries of orders placed in clearance sales helped to boost growth for many. Special discount events and Easter promotions benefited fitted kitchens and bathrooms. Beds, upholstery, bedroom and dining furniture did well, though often benefiting from promotions and new ranges.

Health and Beauty
Toiletries and cosmetics growth edged down but the gain was against a much stronger March 2009. Trade was mixed and often promotion-driven, especially for Mothers’ Day, with new launches doing well. Consumer caution held sales back for the more discretionary products, while shoppers looked for good deals on basic essentials.

Leisure Goods
Book sales remained down on a year ago, amid strong competition between supermarkets and specialists. World Book Day helped children’s titles but non-fiction remained sluggish. Toys continued to do well, though outdoor toys were hit by the cold weather. Computer and electronic games were slow, in the absence of any new releases.

Download retail sales monitor

http://www.brc.org.uk/showDoc04.asp?id=4074&moid=6956

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