22 May 2024, 12:38
By Furniture News May 08, 2019

Furniture performs well against disappointing April sales backdrop

Retail sales fell below expectations in April, according to the latest BRC-KPMG Retail Sales Monitor.

The April figures were positively distorted by the timing of the run-up to Easter, which was in April this year compared to March in 2018. One way of correcting for this distortion is to look at the two-year average, since the Easter effect was reversed last year, depressing sales in April 2018. On a total basis, sales increased by +4.1% in April, against a decrease of -3.1% in April 2018. This was above both the three-month and 12-month average increases of +1.2% and +1.4%, respectively – yet the two-year average growth, which corrects for the Easter distortion, was +0.4% per annum, a slowdown from March’s equivalent of +0.9%.

UK retail sales increased by +3.7% on a LFL basis from April 2018, when they had decreased -4.2% from the preceding year. The two-year average LFL change was -0.3% per annum, a slowdown from March’s +0.1% and February’s +0.3%.

Online sales of non-food products grew +4.3%, against a growth of +6.7% in April 2018. The two-year average growth was +5.5% per annum, in line with March’s +5.4% but below the 12-month average of +6.2%. Online penetration increased from 28% in April 2018 to 29.7% last month.

Paul Martin, partner and UK head of retail at KPMG, says: “Retailers reaped the rewards of Easter and more favourable weather in April, with LFL sales up +3.7% YoY. However, we must remain mindful of the distortion caused by Easter’s timing. 

“Looking at sub-categories, food retailers were clear winners as families came together for festive feasts and even braved their first picnic or barbecue of the year. The long weekend also helped children’s toys and furniture sales, as parents looked to keep youngsters entertained as they returned to home and garden improvements. 

“April may have eased the strain on retailers somewhat, but we can’t overlook the fact that the new tax year also presents retailers with additional costs ranging from increased minimum wages to additional pension contributions. The task of balancing sales and a profitable margin remains crucial, especially given the widespread promotional activity currently.”

The furniture category performed fourth best of 13, up from ninth in the previous month. Online, it occupied the fifth spot of 10, up from sixth.

BRC chief executive Helen Dickinson OBE says: “Retail sales were below expectation [last] month as the sunshine over the Easter weekend persuaded many to pursue recreational, rather than retail, activities. Department stores, as well as clothing and footwear shops, were harder hit by the warmer weather, while food-to-go fared much better from it. 

“Online accounted for a little under 30% of all non-food sales, and we expect this proportion to continue to rise. Nonetheless, the pace of growth has slowed over the course of the year despite the investment that many stores have made in their digital offering."

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