Early Easter boosts retail sales in ‘difficult’ month

Total sales rose 2.3% year on year in the five weeks to March 31, the British Retail Consortium (BRC) and KPMG said, exceeding the three-month average of 1.8%.

On a like-for-like basis, sales advanced 1.4%, compared with the same period last year.

However, numbers were positively distorted by the early timing of Easter.

BRC chief executive Helen Dickinson said the distortion from Easter pushed sales up by over 15% during the holiday week compared with the rest of the month, “only just making up for a sub-zero performance at the start of the month”.

KPMG head of retail Paul Martin said March was “difficult” for many in the retail industry and added that, although great hopes were placed on Easter trading, “the Easter boost didn’t quite measure up to previous years”.

Non-food decline

Over the three months to March, total in-store sales of non-food items fell 3%, and 4% on a like-for-like basis.

Dickinson said there was “no doubt” that the so-called ‘Beast from the East’ played a significant role in deterring shoppers from making store visits, “as well as the ongoing spending squeeze on non-essentials”.

However, online sales of non-food products advanced 7.9% last month, against a growth of 6.6% in March 2017. This is above the three-month and 12-month averages of 6.6% and 7.8% respectively.

Martin said retailers with an online presence were “far more fortunate” last month, with a marked lift in all categories.

“The cold weather clearly persuaded shoppers to peruse from the comfort of their own homes, with beauty and clothing grabbing the most attention,” he said.

The online penetration rate has increased from 20.6% in March 2017 to 22% in March 2018.

Strong appetite for food

In the same period, total food sales jumped 5.3% – up 4.2% like-for-like – marking the strongest three-month average since July 2009.

Unseasonable weather didn’t dampen consumers’ appetites towards food, Dickinson said.

Outlook

Looking ahead, Dickinson said: “There is hope that, with the gap between inflation and wage growth finally narrowing, consumers’ purse strings will slacken to some extent. But the grip on spending power will persist over the course of the year.”

Martin added: “The start of 2018 has already seen a list of casualties, and with trading conditions unlikely to change in the short term, retailers are increasingly having to be clear on their point of differentiation.

“It appears that unless you’re a grocer, bridging the gap between online and offline sales offers the best means of success in this climate.”