24 May 2024, 14:44
By Furniture News Jul 11, 2016

Mixed picture for furniture sales around Brexit

BRC-KPMG has issued a summary of retail sales in June, painting a mixed picture for furniture sales around Brexit.

The start of June was favourably distorted towards furniture sales because of the half-term being the first week of the June period this year against the last week of the May period last year.
However, on a three-month basis, furniture recorded its lowest average since February 2015, confirming the recent slowdown.

GfK’s Climate for Major Purchases Index (pre-referendum) remained unchanged. However, GfK’s one-off post-referendum survey indicated that the Major Purchase Index had dropped 12 points to -3 at the beginning of July as a result of Brexit. In the short-term though, several retailers noticed unexpectedly good demand for furniture in the last week of the month, post referendum. Beds continue to attract most demand, while fitted furniture struggled.

Helen Dickinson OBE, chief executive, British Retail Consortium, says: “Retail sales grew in June, albeit with total growth slowing to 0.2%. While sales did slow towards the end of the month, it is too early to define this as a trend. The month outturn was predominantly driven by a decline in sales in the fashion categories and isn’t a surprise given that June 2015 saw record growth in clothing and footwear. Looking across the last three months, food has held its ground with a better performance than non-food sales, which has seen its lowest growth since April 2012, largely due to fashion combined with a slowdown in furniture.

"Britain's retailers remain open for business. The EU referendum vote has not changed their relentless pursuit of delivering for customers day in, day out, or their investment in meeting the needs of fundamental changes in the way people shop, driven by digital and technology. Despite the fall in the pound, the time it takes for any input price increases to translate into higher shop prices will depend on a combination of factors including further changes in the pound, commodity prices and the challenge for retailers to move pricing given the intensity of competition. So, there won’t be any instant shocks as any changes would take time to feed through.”

David McCorquodale, head of retail, KPMG, adds: “Overall retail figures decelerated in June, with sales down 0.5% on a LFL basis. As consumer attention shifted indoors to escape autumnal downpours, furniture and home accessories bounced back in the month, with bigger ticket items proving relatively resilient in the days immediately following the EU referendum.

“While the ramifications from the Brexit vote may well affect consumer confidence, retailers will be hoping the long-promised heatwave and potential stay-at-home holidays will be enough to drive shoppers back to the high-streets over the months ahead.”

Overall UK retail sales decreased by 0.5% on a LFL basis from June 2015, when they had increased 1.8% from the preceding year. On a total basis, sales rose 0.2% against a 2.9% increase in June 2015, which had been the third best performance of 2015. On a three-month basis, total UK retail sales rose 0.5%, and 1.2% on a 12-month average basis. This is the lowest 12-month average since May 2009.

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