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High street sales have recorded their biggest slump for eight months in April despite figures for the grocers inching up as a result of the timings of Easter.
The British Retail Consortium revealed that total sales last month were flat at 0%, with like-for-like sales coming in at -0.9%, as the cold weather and weak consumer confidence hit fashion retailers particularly hard.
BRC chief executive Helen Dickinson said that April was the second month of flat sales for UK retailers, with positive food sales offset by record declines in fashion. As a result, the 12-month average growth for non-food sales slowed to 2.5% while for food sales it nudged back into positive territory at 0.1%.
The three month average for February to April showed total growth on the high street of 0.3%, held back by a dip in food sales of 0.2% with non-food up 0.7%, according to the latest BRC-KPMG retail sales monitor.
“Overall, flat total sales mask a very mixed picture, with some retailers benefitting from the healthy housing market, while others are evidently more susceptible to the effects of lower consumer confidence and a higher proportion of disposable income going into leisure and entertainment,” Dickinson added.
It echoed the sentiments of Sainsbury’s CEO Mike Coupe last week during the presentation of the supermarket’s full-year results.
David McCorquodale, head of retail at KPMG, said April provided “mild relief” for the grocers with total food and drink sales inching up slightly versus April 2015. “However, as consumers still appear to be hooked on a diet of discounts, deflationary trends in the sector look set to continue,” he added.
IGD CEO Joanne Denney-Finch said: “The varying date of Easter makes comparison difficult at this time of year, but a clearer picture emerges when March and April grocery sales are combined. This shows a small drop versus last year, less than the fall in prices. So we remain in a corridor of uncertainty where sales value is slightly down but sales volume is up.
“Retailers continue to reaffirm their focus on everyday lower prices. 44 per cent of shoppers tell us they would prefer more everyday low pricing than more promotions, with just 14 per cent saying the reverse.”
Morning update
Shares in Hotel Chocolat Group have surged 26% to 186p after the luxury chocolatier started trading on AIM this morning with its first day of dealings getting underway at 8am under the ticker HOTC. The business got away a placing at 148p a share – the top end of its range – valuing the company at a punchy £167m.
After a miserable run in the past week, Tesco has opened this morning almost 2% up at 159.8p, with Coca-Cola HBC (CCH) also rising 1.1% to 1,410p ahead of a trading update on Friday, with Reckitt Benckiser also trading strongly, up 1% to 6,907p. Morrisons and Sainsbury’s are also in the black this morning, up 0.9% to 192.6p and 0.7% to 266.1p respectively. Greggs capitalised on yesterday’s gains (see below) with an early rise of 0.8% to 1,106p.
Yesterday in the City
Greggs (GRG) rose strongly after it revealed 3.7% growth in first quarter like-for-like sales, driven by its overhauled menu and coffee offering. Shares in the high street baker finished the day 2.7% up at 1,097p.
There wasn’t much else in the way of news flow on the stock exchange yesterday but TATE & Lyle (TATE), Associated British Food (ABF) and Greencore all finished up, by 2.9% to 611p, 2.2% to 3,168p and 2% to 367p respectively.
The supermarkets, which had a tough time last week, were under pressure again with Tesco (TSCO) down 1.5% to 156.8p, Sainsbury’s (SBRY) falling 0.9% to 264.2p and Morrisons slipping 0.2% to 190.9p. Ocado (OCDO) also fell 1% to 270p.
The FTSE 100 also finished down 0.2% to 6,114.81 points as the mining stocks slumped.
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