Gloomy Times For UK Retailers

Tuesday, 15 May 2018 10:07

This year, the Easter holiday fell earlier than usual with Easter Sunday on the first of April. This meant that Easter spending (er, chocolate eggs and such…) took place in March, possibly depriving April of some traditional spending. Nevertheless, consumer spending in April was weak with like-for-like sales down by 4.2% on the 2017 mark for April with total sales seeing a 3.1% decline on the same period. The like-for-like data removes the effect of new store openings on the data. The information is collected bt the British Retail Consortium (BRC) and the decline in total sales is the worst fall in the 23-year history of the BRC records which commenced in 1995 (and therefore includes the impact of the Global Financial Crisis).

BRC’s Helen Dickinson put the data in perspective: "A drop in sales this April... was almost inevitable given the earlier timing of Easter. With much of the spending in preparation for the Bank Holiday weekend falling in March this year, a record low in sales growth, in contrast to last year's record high, does not come as a surprise. However, even once we take account of these seasonal distortions, the underlying trend in sales growth is heading downwards".

Within the dataset, sales of fashion items picked up, according to BRC, but spending on grocery and other food declined. "The first glimpse of summer may have temporarily lifted clothing and footwear, but non-food sales overall continue to be weak. Consumers' discretionary spending power remains under pressure and the reality is, that with only a gradual return to solid growth in real incomes expected, the market environment is likely to remain extremely challenging for most retailers," Ms Dickinson remarked.

Domestic consumption is the largest component in the UK economy, so weak consumer sentiment is a concern for obvious reasons. It suggests that despite easing inflation (on the CPI measure) consumers are tightening their belts.

Dr. Mike Campbell is a British scientist and freelance writer. Mike got his doctorate in Ghent, Belgium and has worked in Belgium, France, Monaco and Austria since leaving the UK. As a writer, he specialises in business, science, medicine and environmental subjects.

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