Brexit uncertainty slows sales in March

Brexit continued to impact the retail industry in March, as overall sales slid 0.5%. The BRC–KPMG retail sales monitor also reported a decline in non-food items by 1.5% for the first three months of the year.

The report takes into consideration the distorted timing of Easter by looking at the two-year average, in this case, total sales improved 0.9% per annum, but this was a slowdown from February’s growth of 1.1%.

“Retail sales slowed in March, even when the Easter distortions were accounted for, as greater uncertainty caused people to hold off from splashing out. While jewellery, beauty products and clothing purchases were all up to indulge on Mother’s Day, shoppers were generally cautious not to overspend, particularly on larger items,” said Helen Dickinson, CEO of the BRC.

Brexit continues to feed the uncertainty among consumers. For the sake of everyone, MPs must rally behind a plan of action that avoids no deal – and quickly – or it will be ordinary families who suffer as a result of higher prices and less choice on the shelves.”

Meanwhile, online penetration increased from 28.5% in March 2018 to 29.9% last month. Non-food products grew 3% in March compared to 7.9% growth last year, while two-year average growth was 5.4% per annum, a slowdown from February’s 5.9%.

Sue Richardson, retail director UK at KPMG said that March marked a “truly disappointing end to the first quarter of 2019”.

“Not only did total sales fall 0.5% compared to the same month last year, but no further clarity around Brexit came to light, and shoppers continue to waiver.”

She pointed out that while clothing retailers reaped the rewards of more favourable weather, big-ticket items such as furniture, suffered, suggesting customers are holding out for more financial certainty. “Online sales may have performed better than the high street, but the high proportion of sales occurring online actually nods towards the underlying issue of profit pressure.

“Retailers will be hoping for an end to this sustained uncertainty – it’s clearly not good for business – but times have already well and truly changed, and agility remains the best form of defence.”

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