In the retail industry, the trend of late has seen consumers purchase items for the home and DIY materials rather than clothing in a bid to save money whilst still capitalising on promotions brought about by the Government’s Help to Buy campaign for first time homeowners. However, last month fashion sales picked up as a result of the increasingly warm weather, providing a much needed boost for retailers on the High Street.
According to figures from the British Retail Consortium (BRC) and KPMG’s monthly Retail Sales Monitor, sales of women’s wear items such as summer dresses and ballet pumps soared last month as the sudden burst of sunshine coincided with many stores launching their spring and summer ranges.
Although retail sales fell by 1.7 per cent on a like for like basis when compared to March 2013, and 0.3 per cent on a total basis, this was a much softer decline than expected by analysts and was largely accounted for by the late timing of the Easter holidays this year.
Director General of the BRC, Helen Dickinson, believes this result indicates that retailers may experience a better financial year in terms of sales as the summer progresses.
She says; “These sales figures are stronger than might have been expected given the fact that Easter has fallen so late this year.
“Fashion has performed particularly well – retailers have worked hard to create popular new collections, and have been rewarded with strong demand for women’s clothing and footwear in particular.
“This improves on the slow start to the season last year when shoppers were more reluctant to spruce up their wardrobes.”
Surprisingly, furniture and home ware sales were two of the weaker aspects of last month’s report, as they are usually most popular during the Easter holidays. Another disappointment was a further drop in food sales, which head of retail at KPMG David McCorquodale believes will only fuel the desire by supermarket groups in particular to channel further investment into the newly emerging price war.
He says; “Food sales fell in like for like value again this month and the decision by some of the major grocers to go head to head in a billion pound price war will exacerbate this situation.”
Aside from food sales, the retail industry seems to be getting back onto its feet in fine form as 2014 progresses, with March’s result meaning that like for like sales have climbed by 0.5 per cent over the last three months. This would be higher, but an unprecedented rise in popularity by discount or bargain brands such as Lidl and Aldi have skewed figures somewhat and may mean food sales totals remain disappointing for some time to come.
With retailers still keen to attract customers by lowering prices, it will be interesting to see how this will affect profits in the coming month or so as quarterly results are unveiled. Hopefully this new enthusiasm for consumer spending will continue and allow retailers to focus upon profit margins before the season is out.
Do you think brands are actually damaging themselves by engaging in frequent promotional activity – or is a strong customer base more important than the bottom line in terms of survival?
