The latest research and analysis from the BRC

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The British Retail Consortium produces unbiased research and analysis on retail performance and the economic drivers influencing the British retail industry. The MIA’s Membership with the BRC gives us access to an expanded portfolio of content to share with our members. We’re pleased to share the headline statistics from 4 reports on shop price index, UK retail sales, footfall, and economic briefing for August 2021. 

Growth in retail sales slowed for August whilst online sales are still high, demonstrating how the pandemic has shifted the digital-physical shopping balance. Low prices are already under threat with HGV driver shortages creating an additional problem, with a shortfall of 90,000 drivers. It appears August’s footfall was a tentative step in the right direction with minor improvements following the return of some workers to the office.

The BRC-KPMG Retail Sales Monitor for August 2021

Headline Statistics: 

  • On a Total basis, sales increased by 3.0% in August, against a growth of 3.9% in August 2020. This is below the 3-month average growth of 6.9% and the 12-month average growth of 10.3%.
  • UK retail sales increased 1.5% on a Like-for-like basis from August 2020, when they had increased 4.7% from the preceding year.
  • Over the three months to August, Food sales increased 1.9% on a Like-for-like basis and increased 2.9% on a Total basis. This is below the 12-month Total average growth of 5.4%. For the month of August, Food was in growth year-on-year.
  • Over the three-months to August, Non-Food retail sales increased by 6.8% on a like-for-like basis and 10.3% on a Total basis. This is below the 12-month Total average growth of 14.4%. For the month of August, Non-Food was in growth year-on-year.
  •  Over the three months to August, In-Store sales of Non-Food items grew 23.7% on a Total basis and increased 16.7% on a Like-for-like basis. The Total growth was above the 12-month average of 21.7%.
  • Over the three-months to December, In-store sales declined 1.2% on a Total basis and 1.4% on a like-for-like basis.
  • Online Non-Food sales decreased by 4.6% in August, against a growth of 42.4% in August 2020. This is below the 3-mth average decline of 3.5%. Non-Food Online penetration rate decreased from 39.3% in August 2020 to 38.3% this August.

The BRC-SENSORMATIC IQ Footfall Monitor for August 2021 

Key Findings include:

  • Total UK Footfall decreased by 18.0% in August (Yo2Y), with a 10.0 percentage point increase from July. This is above the 3-month average decline of 24.6%.
  • Footfall on High Streets declined by 24.8% in August (Yo2Y), 9.8 percentage points above last month’s rate and above the 3-month average decline of 31.0%.
  • Retail Parks saw footfall decrease by 1.6% (Yo2Y), 13.4 percentage points above last month’s rate and above the 3-month average decline of 10.0%.
  • Shopping Centre footfall declined by 32.9% (Yo2Y), 5.5 percentage points above last month’s rate and above the 3-month average decline of 36.6%.

The BRC Economic Briefing Report for August 2021

Headline Statistics: 

  • The UK economy expanded by 4.8% in Q2, following a contraction of 1.6% in Q1. Despite the solid Q2 rebound, GDP remained 4.4% below its Q4 2019 level.
  • The rapid economic bounce back was mirrored in the labour market. The number of people in employment rose to 32.28m in Q2, up by 95,000, the strongest jump in recruitment since restrictions were first imposed. At the same time, job vacancies have reached a record high, now above their pre-pandemic level, with growth in recruitment surpassing expectations in Q2.
  • In June, 1.9mill workers remained on furlough in the UK, down from 2.7mill in May. 20% of all furloughs were in the accommodation and food service sector and 9% in retail. In retail, 172,000 employees remained furloughed in June, down from 221,000 in May.
  • In July, annual inflation slowed more than expected to 2.0%, down from 2.5% in June. The fall back in inflation is not expected to last. The Bank of England forecasts inflation to rise to 4.0% in Q4, but to dip to 1.9% by 2023.
  • Despite a faster than expected pick up in prices over the past months, the Bank of England expects these price hikes to be temporary. As a result, the Bank kept rates unchanged at a record low of 0.1%.

The BRC-NielsenIQ Shop Price Index for August 2021

Summary: 

  • Shop Price deflation eased to 0.8% year-on-year in August compared to July’s decrease of 1.2%. This is a slower rate of decline than the 12- and 6-month average price decreases of 1.5% and 1.2%, respectively.
  • Non-Food deflation slowed to 1.2% in August, compared to a fall of 1.8% in July. This is a slower rate of decline than the 12- and 6-month average price declines of 2.6% and 1.8%, respectively.
  • Food deflation decelerated to 0.2% in August from July’s deflation of 0.4%. This is the fifth consecutive month when Food prices fell. This is below the 12-month average price growth rate of 0.3% and in line with the 6-month average price growth rate of -0.2%.
  • Fresh Food prices fell for the ninth consecutive month in August, with deflation easing to 0.6% from a decline of 1.0% in July. This is in line with the 12- month average price growth rate of -0.6% and below the 6-month average price growth of -0.9%.
  • Ambient Food inflation eased to 0.3% in August, down from 0.5% in July. This is the lowest rate of inflation for the category since January 2017. This is below the 12- and 6-month average price increases of 1.5% and 0.8%, respectively.

Helen Dickinson OBE, Chief Executive, British Retail Consortium, said:

“While it is good news that overall retail prices fell year on year, there was a slight rise in prices on the previous month. There are some modest indications that rising costs are starting to filter through into product prices. Some of the Non-Food categories, such as electricals, saw sharp rises in inflation compared to last year, owing to global issues from delayed shipping and shortages of microchips. Food retailers are fighting to keep their prices down as far as possible. But mounting pressures – from rising commodity and shipping costs as well as Brexit-related red tape, mean this will not be sustainable for much longer, and Food price rises are likely in the coming months.

“Low prices are already under threat, and now the HGV driver shortage has created an additional problem with a shortfall of 90,000 drivers. Disruption has been limited so far, but in the run up to Christmas the situation could get worse, and customers may see reduced choice and increased prices for their favourite products and presents. The Government must act swiftly and rapidly increase the number of HGV driving tests taking place, provide temporary visas for EU drivers, and make changes on how HGV driver training can be funded. Without Government action, it will be the British consumers who will pay the price.”

As a member of the BRC, the MIA can share the reports mentioned below with our members. If you are an MIA member and you would like to see any of these reports in full, please contact alice@mia.org.uk