The latest BRC-KPMG Retail Sales Monitor, shows on a Total basis, retail sales decreased by 0.3% in April, against an increase of 51.1% in April 2021. This is below the 3-month average growth of 3.2% and the 12-month average growth of 6.4%.
On a three-year basis, Total retail sales grew 3.9% (Yo3Y) during April compared with the same month in 2019.
UK retail sales decreased 1.7% on a Like-for-like basis from April 2021, when they had increased 39.6%. This was below the 3-month average growth of 0.1% and the 12-month average growth of 3.3%.
Over the three months to April, Food sales decreased 1.8% on a like-for-like basis and 1.3% on a Total basis. This is below the 12-month Total average growth of 0.7%. For the month of April, Food was in growth year-on-year.
Over the three-months to April, Non-Food retail sales increased by 1.8% on a like-for-like basis and 6.9% on a Total basis. This is below the 12-month Total average growth of 11.1%. For the month of April, Non-Food was in decline year-on-year.
Susan Barratt, CEO at IGD said, “Supported by holiday spending for Easter, at first glance food and drink sales performed well in April. However, with mis-matched dates for Easter, plus our emergence from the 2021 lockdown when grocery sales were unusually elevated, it’s difficult to draw firm conclusions.
'However, there’s no doubt the sector is operating against a backdrop of rising inflation, which reached a 30-year-high in April and is creating an unprecedented set of challenges.
“As such, the mood of shoppers is bleak and IGD’s Shopper Confidence Index remains very low. With around 70% experiencing rising food, energy and petrol bills, shoppers are becoming divided in how they cope with the cost-of-living crisis and one in seven of the least affluent households claim to be missing more meals.
'IGD predicts that inflation is likely to peak higher and last longer than official forecasts. Therefore, shoppers will face severe financial pressures for at least the rest of the year, especially as they contend with the full effect of the rise in the energy price cap.”
Helen Dickinson OBE, Chief Executive, British Retail Consortium, said, “The rising cost of living has crushed consumer confidence and put the brakes on consumer spending. Sales growth has been slowing since January, though the real extent of this decline has been masked by rising inflation.
“Customers face a difficult year; with the Bank of England predicting inflation to reach more than 10%. Retailers are experiencing higher costs as a result of rising commodity prices, transport costs, labour shortages, delays at ports, and the war in Ukraine. Further headwinds are incoming, such as rising global food prices, which rose 13% between March and April.
'Retailers will continue to do all they can to mitigate the effects of these costs rises, but unfortunately they cannot absorb them all.”
Paul Martin, UK Head of Retail at KPMG, said, “The cost of living crisis came home to roost for retailers in April, with sales growth going into decline for the first time in 15 months.
“Food and drink bounced back with 3% growth in April – largely due to Easter falling later this year.
“With interest rates and inflation rising and the Bank of England warning of a possible recession, the squeeze on disposable household income is starting to have an impact on the high street.
'Against a backdrop of falling consumer confidence, the retail sector has a bumpy time ahead as they face spiraling cost pressures from all directions.
'Many retailers will have no choice but to raise prices to protect margins, but the longer we see high inflation and real household incomes falling, the more likely it is that consumers will change their spending behaviour, prompting a decline in the health of the retail sector and possibly more casualties on the high street.”
(source: BRC-KPMG, image: pexels)
