Early Easter hits UK retail sales for April
UK retail sales in April were affected by the earlier Easter this year, the British Retail Consortium (BRC) confirmed today.
A new report from the BRC shows that retail sales values in April 2013 were down 2.2% on a like-for-like basis from April 2012 and fell by 0.6% on a total basis, with growth negatively impacted by the fact that Easter fell in April last year but in March this year.
Online sales continued to increase, rising by 8.3% compared to April 2012.
BRC director general Helen Dickinson commented that, excluding the Easter distortion, April was actually a better month than March, especially for non-food sales. The weather had a big influence on buying habits, with the prolonged cold meaning that shoppers had little interest in new season clothing and footwear ranges early in the month but that changed when the weather warmed up.
Consumers’ willingness to spend remains volatile. “A convincing trend towards revival is hard to spot and competitive pricing is still critical to generating sales, despite the effect on margins and on retailers’ ability to invest in offering customers new ways to shop,” Dickinson added.
David McCorquodale, head of retail at consultancy firm KPMG, highlighted the fact that the three-month weighted average, which smooths out the effect of the timing of Easter, shows a total increase in retail sales of 2.6%. This indicates that the health of the retail sector is holding up and may be on a positive trajectory, although it is yet to be seen at what margins these sales are being achieved and what is the cost of fulfilling the online demand, he said.
Taking into account Shop Price Index inflation, total retail sales were down 1.0% in real terms in April while the three-month average shows growth of 1.6%.
Another insight into the state of the UK retail sector came this morning with the release of a trading update from shopping centres operator Intu Properties. The company, which owns or part-owns 15 shopping centres across the country, including Lakeside and Manchester’s Trafford Centre, said that the retail environment remains “difficult” and retailers continue to be cautious about entering into store commitments.
In the first quarter of 2013 footfall in Intu’s shopping centres was down 1% compared to a year earlier, although the company noted that this still represents a significant out-performance of Experian’s measure of UK national retail footfall, which declined by 4% as a result of the weak economic background.
Although shop failures, lease expiries and tenant caution over new store commitments are likely to continue to affect short term earnings, Intu said that it is maximising the opportunities available in the changing marketplace, for example by introducing free high-speed Wi-Fi, a new mobile website and click and collect services.