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'It's vital that the next Government helps retailers keep prices low' says BRC as UK sales slow

Laura  Barnes
'It's vital that the next Government helps retailers keep prices low' says BRC as UK sales slow

The latest retail sales monitor report from BRC and KPMG has revealed that consumer spending slowed in May both online and on the high street.

Last month, UK retail sales decreased by 0.4% on a like-for-like basis from May 2016, when they had increased 0.5% from the preceding year.

On a total basis, sales rose 0.2% in May, against a growth of 1.4% in May 2016. This is the lowest since January, excluding Easter distortions, and below the 3-month and 12-month averages of 1.9% and 1.2% respectively.

Over the three-months to May, non-food retail sales in the UK decreased 0.3% on a like-for-like basis and increased 0.1% on a total basis, below the 12-month Total average growth to 0.5%. May’s total non-food performance was the worst recorded since May 2011.
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“Overall, May’s sales slowdown is indicative of a longer term trend of a decline in consumer spending power. As household budgets become increasingly squeezed by inflation, predominantly in the non-retail part of the consumer basket, it’s vital that the next Government helps retailers keep prices low for ordinary shoppers, said BRC chief executive Helen Dickinson OBE.

“This means, as well as securing a tariff-free trade deal with the EU, negotiating frictionless customs arrangements; providing certainty for EU colleagues working in the UK; and ensuring the continuity of existing EU legislation as it transfers into UK law.”

BRC and KPMG also reported sluggish online growth.

Online sales of non-food products in the UK grew 4.3% in May compared to 13.7% rise a year earlier. This is the lowest growth since December 2012.

Over the 3 months to May, online sales of non-food products in the UK grew 7.0% year-on-year, the lowest in the BRC series started in December 2012.

“For the second consecutive month, the increase in the online penetration rate has remained below one percentage point. Retailers will be increasingly looking to innovate and optimise their online channels to convert a greater share of online browsing into sales,” sad Dickinson.

Paul Martin, head of retail at KPMG added: “With such meagre growth in online sales in May, it is vital online retailers master the art of customer-centricity and personalisation. Ensuring the right products are available at the right time, and that surplus stock is not sold at significantly reduced prices, is becoming ever more important.

“Success will come from an ability to target the online shoppers who spend more and return less.”

Tags: Retail , government , kpmg , brc , retail sales monitor

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