The most recent figures from the British Retail Discussion board has not offered comfortable studying for retailers with like for like gross sales down 0.4% in Could while internet gross sales of non-food merchandise had been rising at their lowest since data started.
The figures broadly in contrast with Visa’s Shopper Spending Index report for Could which confirmed a fall in total client spending for the primary time in almost 4 years with a drop of 0.8% in comparison with this time final yr.
Bricks and mortar retailers are seeing the better difficulties, with gross sales dropping on the quickest stage in over 5 years. While Could normally sees sturdy brick and mortar gross sales because of good climate and Could financial institution holidays, it appears increasingly more buyers are feeling the squeeze that rising inflation is inflicting. Paul Martin, head of UK retail at KPMG says:
“The impression of inflationary pressures on the nation’s purse continues to play out on this month’s figures, with buyers evidently spending extra on foods and drinks than on non-food purchases,” he stated.
“With inflation persevering with to rise and wage development stagnating, customers are beginning to really feel the pinch – though the highly-competitive nature of the UK grocery market continues to play out within the client’s favour. Many retailers, significantly trend shops, can be poised and able to take advantage of the upcoming summer season, so hopefully the climate will play truthful.”
Kevin Jenkins, managing director at Visa within the UK agrees, saying that with rising costs and stalling wage development, it was clear “extra of us are beginning to really feel the squeeze”.
“Bricks-and-mortar retailers had a very difficult month, with gross sales dropping on the quickest stage in over 5 years, at a time when hotter climate and the Could financial institution holidays would normally drive buyers on to the excessive road,” he stated.
On-line gross sales of non-food merchandise could also be rising at their lowest ranges since data started in 2012, however they’re nonetheless on the rise, simply not as a lot as we have now seen previously. In Could 2017, they had been up by simply 4.3% final month in comparison with a a lot larger rise of 13.7% in Could 2016.
Helen Dickinson OBE, chief govt, British Retail Consortium stated: “The slowdown in total non-food gross sales was mirrored on-line in Could as annual development fell to its lowest on file. Although gross sales in all classes however one noticed development, this was subdued as customers held again on non-essential purchases.
“For the second consecutive month, the rise within the on-line penetration fee has remained beneath one proportion level. Retailers can be more and more seeking to innovate and optimise their on-line channels to transform a better share of on-line shopping into gross sales.”
