Industry reacts to biggest UK retail sales decline on record

The latest KPMG-BRC Retail Sales Monitor has reported the biggest decline in UK retail sales since records began in January 1995.

Covering the four weeks from 28th April to 25th May 2019, the report shows that on a total basis, sales decreased by 2.7% in May. Excluding Easter distortions, this is the worst decline since this record began. However, this was against an increase of 4.1% in May 2018, itself a four year record.

UK retail sales decreased by 3.0% on a Like-for-like basis from May 2018, when they had increased 2.8% from the preceding year. This was the steepest Like-for-like decline since December 2008, excluding Easter distortions.

Over the three months to May, in-store sales of non-food items declined 2.7% on both a total and like-for-like basis. This is worse than the 12-month total average decline of 2.4%.

Here’s what the industry had to say about the news:

Helen Dickinson OBE, chief executive of BRC

“With the biggest decline in retail sales on record, the risk of further job losses and store closures will only increase. While May 2018 offered almost unbroken sunshine, topped off by the run up to the World Cup and the marriage of Meghan and Harry, May 2019 delivered political and economic uncertainty. Food sales dropped for the first time since June 2016, with further declines in clothing, footwear and outdoor goods.

“With retail conditions the toughest they have been for a decade, politicians must act to support the successful reinvention of our high streets and local communities. Business rates remain a barrier, preventing many retailers from investing in their physical space. We have a broken tax system, which sees retailers paying vast sums of money regardless of whether they make a penny at the till, and yet the Government is failing to act. The legislation is falling behind the technological revolution.”

Paul Martin, UK head of retail at KPMG

“April may have provided retailers with some light reprieve thanks to Easter, but May’s staggering fall of 3% like-for-like is a stark reminder of the industry’s ongoing issues, which for many require urgent attention.

“We are of course comparing this month’s growth against a stellar May in 2018, but even the 3-month average – which softens the monthly volatility – demonstrates that achieving growth in retail remains a real struggle.

“The extremely low growth online is real cause for concern, especially with almost a third of all non-food sales today being made online. This trend has continued to manifest itself over the last year and requires real focus from the retail community.”

Bruno Ferreira, vice president for UK & Ireland at UiPath

”It isn’t new news that the retail sector is having to ‘adapt or die’, but the retailers that adapt most rapidly, are the ones that are going to be able to stay the course and come out ahead. The main enabler, and differentiator, during this period of change will be the quick adoption of effective technology solutions.

“Technology like Robotic Process Automation (RPA), is easily integrated to work alongside legacy systems and will allow retailers to harness the power of fast and highly efficient software robots. RPA is one form of technology that can deliver benefits at all points of the retail journey – from supply chain with software robots making judgements and analysis based on data patterns to back office (e.g. invoice processing or onboarding and offboarding seasonal employees) and end user experience (in the call centres where every agent can benefit from a software robot’s support). Working alongside humans to deliver tangible business efficiencies and superior customer service, RPA is just one technology that retailers should be looking to take advantage of now.

“The winners in today’s retail sector will be those that choose not to be weighed down by legacy systems and recognise how much benefit technology can deliver to their businesses.”

Michael Schirrmacher, managing director at Bloomreach

“With the biggest decline in retail sales on record there is no denying that this is an extremely volatile time for many retailers. With online sales still performing better than in-store sales, many retailers will be looking to fine-tune their digital experience to improve customer confidence and increase conversion.

“Undoubtably, the digital imprint of many retailers is varied and diverse with much of the focus on high-traffic pages. Normally these boil down to the homepage, search results and category pages. Yet many retailers may be missing the mark around what is truly important to the end-consumer – a fully personalised experience. Importantly, incorporating features such as fool-proof search, personalised content and personalised merchandising can make online a much more enjoyable experience for customers and a much more profitable one for retailers too.

“At a time when customer-centricity has never been more important, mastering the online experience can ultimately be the difference between whether a business prospers or falters amid this difficult trading climate that persists.”

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