Retail sales decline in March as Easter proves disruption, BRC-KPMG says

UK retail sales in March were flat compared to the previous year but down 0.7% on a like-for-like basis, according to the industry's benchmark survey.

The BRC-KPMG Retail Sales Monitor showed three-month ‎total retail sales were 1.4% higher and LFL takings were up 0.6%.

Flat total sales in March were somewhat distorted by the earlier timing of Easter in 2016 and its impact on school holidays, which seemed to prove a cross to bear rather than bring any resurrection for the sector.

This was hard on food sales, which declined 0.7% in the quarter, the largest decrease since June.

Non-food sales were up 3% in the quarter compared to the previous year, with fashion clothing and footwear sales also hit by early Easter buying postponements as they endured their largest decline since September 2014, despite increased promotional activity.

However, the BRC maintained there was a "bit of a mixed picture", thanks to robust big ticket sales and furniture being the main contributor of total sales growth.

The 12-month moving average slowed to 1.4% for the whole industry, the slowest rate of progress since last August.

"This slowdown can’t be viewed in isolation," said British Retail Consortium chief Helen Dickinson, "retail is an industry undergoing significant structural change as the investment in the digital offer continues apace while, from a consumer perspective, more disposable income is being spent on leisure and entertainment.”

Independent analyst Nick Bubb said that given the early fall of Easter, today’s survey for March should have been quite good, but in fact the outcome was "very disappointing".

He added: "The BRC ties itself into knots trying to argue that the weak food sales figures resulted from the fall of Easter Sunday."

Shore Capital's Clive Black said the update's mood seemed a "bit mellow" to his mind.

"Following Lord Wolfson's recent comments, the BRC also mention growing expenditure upon leisure and entertainment, which may be hitting retail sales, whilst the industry continues to seek to manage channel change.

"Cost pressures are to the fore in retail with the National Living Wage now implemented. Additionally, there seems to be uncertainty surrounding the EU referendum, which certainly isn't helping retail sentiment. The next quarter could be tough enough for retail without a diversion of cash to the travel and leisure segment."