Threat of no-deal suppresses September spend, says BRC-KPMG
Retail sales decreased by -1.3% in September, against an increase of +0.7% in September 2018, reports BRC-KPMG, as the threat of a no-deal Brexit dissuaded shopper spend. It is the worst September performance since the associations’ records began in 1995.
UK retail sales decreased by -1.7% on a LFL basis YoY.
Online sales of non-food products grew +0.7% – the worst rate yet recorded, against +5.4% in September 2018. Non-food online penetration rate increased from 28.0% in September 2018 to 29.9% last month.
BRC chief executive Helen Dickinson OBE says: “With the spectre of a no-deal weighing increasingly on consumer purchasing decisions, it is no surprise that sales growth has once again fallen into the red. Many consumers held off from non-essential purchases, or shopped around for the bigger discounts, while the new autumn clothing ranges suffered from the warmer September weather. The longer-term prospect continues to be bleak, with the 12-month average once again plumbing new depths at a mere 0.2%. Online non-food sales growth was the lowest on record, though still compared favourably to the decline in growth at physical stores.
“With four months of negative sales growth since March, the ongoing political gridlock surrounding Brexit is harming both consumers and retailers. Clarity is needed over our future trading relationship with our closest neighbours, and it is vitally important that Britain does not leave the EU without a deal.”
Paul Martin, UK head of retail at KPMG, adds: “We will likely experience increased promotional activity to clear surplus stock, which doesn’t bear well for retailers desperately trying to make up for lost ground after several difficult months. Retailers’ focus needs to be on cost and efficiency, with only the leanest and most efficient operations coping with this extreme test of endurance. October, and the ramping-up of Brexit plans, will clearly be a real test for the industry as a whole.”