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 3 reports on UK retail sales, footfall and shop price index for October 2021.

‘Demand getting back on track ahead of Christmas’

The BRC-KPMG Retail Sales Monitor

Covering the five weeks 3 – 30 October 2021

  • On a Total basis, sales increased by 1.3% in October, against a growth of 4.9% in October 2020. This is below the 3-month average growth of 1.7% and the 12-month average growth of 10.2%.
    • On a 2-year basis, Total retail sales grew 6.3% during October compared with the same month in 2019.
  • UK retail sales decreased 0.2% on a Like-for-like basis from October 2020, when they had increased 5.2%. This was below both the 3-month average growth of 0.3% and the 12-month average growth of 10.6%.
  • Over the three months to October, Food sales increased 1.5% on a Total basis and 0.3% on a Like-for-like basis. This is below the 12-month Total average growth of 4.7%. For the month of October, Food was in growth year-on-year.
  • Over the three-months to October, Non-Food retail sales increased by 1.8% on a Total basis and decreased by 0.1% on a like-for-like basis. This is below the 12-month Total average growth of 14.9%. For the month of October, Non-Food was in growth year-on-year.
    • On a 2-year basis, Non-Food sales saw growth of 7.4% for the three-months to October.
  • Over the three months to October, In-Store sales of Non-Food items grew 7.9% on a Total basis and increased 4.5% on a Like-for-like basis. The Total growth was below the 12-month average of 26.3%.
    • On a 2-year basis, stores saw a decline of 4.4% on a like-for-like basis and 2.0% on a Total basis.
  • Online Non-Food sales decreased by 8.0% in October, against a growth of 39.0% in October 2020. This is below the 3-mth average decline of 6.1%.
  • Non-Food Online penetration rate decreased to 42.0% in October from 48.8% in October 2020. While down on last year, it was up 10.4 percentage points on the 31.6% seen at the same point in 2019.

Helen Dickinson OBE, Chief Executive of the British Retail Consortium, said:
“Customer demand is getting back on track ahead of Christmas as sales grew at a faster rate than the month prior, and well above its pre-pandemic levels. As social calendars started filling up with festivities, clothing and footwear sales performed well. Meanwhile, furniture and electrical sales were held back by global logistical issues and microchip shortages. With Halloween heavily curtailed by the pandemic last year, chocolates and children’s costumes sold a treat as families made the most of the occasion.

“Some people started their Christmas shopping early with beauty advent calendars flying off the shelves and searches for Christmas items ramping up online. Retailers are doing everything they can to offer customers the choice and availability required throughout the industry’s busiest period, prioritising the food and other festive products needed to celebrate. Retailers are hopeful that demand will continue right through the golden quarter, however, there are challenges ahead with higher prices on the horizon compounded by the many increasing costs faced by consumers such as higher energy bills and rising national insurance.”

Paul Martin, UK Head of Retail | KPMG
“October provided a modest boost for the high street as total retail sales grew by 1.3% compared to last year.

“Clothing and health and beauty sales continued to dominate at the tills whilst demand for home-related purchases declined further and grocers had another poor month with food and drink sales muted at 0.27%

“Confident consumers are heading to physical stores to make purchases, as online sales fell yet again in October, although with penetration rates at 42% online shopping remains significantly higher than pre-Covid-19 levels.

“The much reported squeeze on household spending has yet to materialise as consumers seem happy to carry on shopping. Limited availability of stock has created strong pricing dynamics, which means we are unlikely to see any big discounting this Christmas, and many retailers will be hoping consumers are willing to buy the most sought after gifts at any price. With rising costs putting a strain on most retailers, they will be placing all hopes that demand remains strong as consumers plan for a bumper Christmas, shopping early for those much wanted gifts and spending more than last year when Christmas gatherings were cancelled. The main concern is now how trade will develop post-Christmas into 2022″

UK Streets ahead of Major EU Economies

BRC-Sensormatic IQ Footfall data:

  • Total UK Footfall decreased by 13.7% in October (Yo2Y), with a 3.2 percentage point improvement from September. This is above the 3-month average decline of 16.0%.
    o   This was ahead of Spain (-19.8%), Germany (-26.1%), Italy (-34.6%) and France (-34.9%) in October (Yo2Y).
  • Footfall on High Streets declined by 18.3% in October (Yo2Y), 4.3 percentage points above last month’s rate and above the 3-month average decline of 21.8%.
  • Retail Parks saw footfall decrease by 0.4% (Yo2Y), 1.2 percentage points above last month’s rate and above the 3-month average decline of 1.4%.
  • Shopping Centre footfall declined by 33.6% (Yo2Y), 2.6 percentage points above last month’s rate and above the 3-month average decline of 34.3%.
  • Northern Ireland saw the shallowest footfall decline of all regions at -10.8%, followed by Wales at -13.1% and England at -13.7%. For the third consecutive month, Scotland saw the deepest decline at -17.0%.

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

“It was great to see the UK leading the way for footfall in October among the major European economies. This gives more retailers a reason to be hopeful as we enter the crucial golden quarter, with many embracing both digital and physical connections with their customers, and indicates that retail is playing a key part in the economic recovery. Footfall in retail parks almost reached its pre-pandemic level with their attractive offer of larger stores and free parking.

“While many UK cities have seen a significant rise in footfall in recent months, the largest cities – London, Birmingham and Glasgow – continue to lag behind other areas. Lower tourism levels, more working from home and lower usage of public transport due to Covid have disproportionately affected these cities as a result, as well as holding back shopping in city centres across the UK.”

 Andy Sumpter, Retail Consultant EMEA for Sensormatic Solutions, commented:

“October’s footfall bounced back after the September slowdown, as traffic was bolstered by half term and Halloween – now retail’s third-biggest trading event after Christmas and Easter.  Halloween proved a welcomed excuse for seasonal socialising and helped consumer confidence around in-store shopping to remain un-spooked by the UK’s rising covid-19 infection rates.”

“Some of the lift in footfall performance, which saw retail parks in particular rise to their highest point of recovery since the start of the pandemic, may also be attributed to early Christmas spend, as retailers brought forward Christmas range launches to help smooth out supply chain bumps ahead of the peak trading period and consumers also indicated they would shop earlier for the festive season this year.”

Higher prices likely in run up to Christmas

The BRC-Nielsen Shop Price Index is a monthly measure of UK shop price inflation. The SPI measures changes in the price of 500 of the most commonly bought items. The report demonstrates the extent to which retailers contribute to inflation through the pricing of commonly bought goods

Helen Dickinson OBE, Chief Executive, British Retail Consortium:

While overall prices remain below their October 2020 levels, this is the third consecutive month of both food and non-food month on month rises. October food prices saw the highest rate of year-on-year inflation since November 2020, with fresh food prices rising for the first time in ten months. Meanwhile, in non-food, ongoing global shortages of materials and supply issues with logistics and shipping continue to put upward cost pressures on products such as furniture. It is now clear that the increased costs from labour shortages, supply chain issues and rising commodity prices have started filtering through to the consumer.”

“Tight margins mean retailers may not be able to absorb all of these new costs, so prices will continue to rise. A BRC survey showed three in five retailers expect prices to increase in the run up to Christmas, and the ongoing labour shortages are making the situation worse. Retailers continue to do all they can ensure value for money for customers and are looking to work with Government to find a long-term solution to these shortages, otherwise it is the British consumer, who already face higher energy bills this winter, who will suffer the consequences.

Mike Watkins, Head of Retailer and Business Insight, NielsenIQ:

With food prices slowly increasing we can expect shoppers to start to rebalance basket spend over the next few weeks, particularly with increased concerns about discretionary spend. And with consumer sentiment now more cautious we cannot ignore that availability issues are still top of mind. So consumers will be uncertain about when and where to spend and with Christmas promotions about to kick in, competition will intensify in both food and non-food retailing.

As a member of the BRC, the MIA can share the full reports with our members. If you would like to see any of these 3 reports in full, please contact 
alice@mia.org.uk