UK retail sales fall to dramatic low
High street sales have fallen to an all-time low since records began 16 years ago, new figures from the British Retail Consortium (BRC) can reveal today.
Non-food sectors have been hit harder than food retail, with only footwear seeing some growth. Clothes and book sales suffered their largest declines since 2009 and 2005 respectively. Just last month Greetings Today reported that Clinton Cards half-year profits were down 70 percent, mirroring the latest BRC news.
The BRC said total sales in March were down 1.9% on a year ago, although the early timing of Easter last year had an effect on the figures. Meanwhile, like-for-like sales were down 3.5%, in their worst showing in nearly six years. Internet sales were 7.5% higher than a year ago, much weaker than the 10.4% in February.
Director General of the BRC Stephen Robertson, said: “Non food has had a much poorer month than food and it is the non food businesses where we’ve seen a clutch of businesses talking about administration and profit warnings.
“Easter is very late this year, and that does have an impact on the figures, but not enough to explain the 2 percent fall and even greater in non-food. And while it makes it difficult to compare apples with apples year on year, it still in our view this shows a very strong decline on the High Street.”
Internet sales, which have been defying the general downward trend, showed their slowest growth since records began in 2008. “Even the online players who usually show 15-20 percent growth this month have only reported just over 7 percent,” Robertson said.
The BRC said shoppers did not want to spend unless they really had to. But it is not entirely bad news for the greetings industry as it appears to be big-ticket items that are bearing the brunt of consumers cautious spending habits.
“Customer confidence is low because house prices are declining, and potential job losses round the corner. More important, more immediate than that - for the first time in 30 years, disposable incomes have dropped so we simply have less to spend so things like big-ticket items, furniture, floor coverings and electrical goods. We say ‘we wont get them this month, we’ll leave them for a year’.” added Director General of the BRC Stephen Robertson.
Retail analysts at KPMG have also confirmed the findings. “We have seen an emergence of new, lower spending patterns since the middle of January, which are currently continuing to trend downwards," said Helen Dickinson, head of retail at survey partner KPMG.
"Many retailers will not be able to sustain this ongoing weakness in demand beyond the short-term and are hoping for some good news around the extended bank holiday period and a feel-good factor driven by the royal wedding."
The poor sales figures came despite the fact that more consumers visited the High Street, separate figures suggested. Research group Springboard said that footfall in town centres and High Streets across the UK rose by 7.8% in March compared with the previous month, and fell by 1.3% against a year earlier - the smallest annual decline in four years.
"Whilst it is early days, this starts to tell a positive story about how consumers are returning to their local High Streets," said Steve Booth, Springboard's chief executive.