Retail spending up as shoppers make more home improvements

UK retail sales grew by 4.2% in April, compared with the same month last year, with furniture and flooring emerging as the best performing category, according to the British Retail Consortium/KPMG retail sales index.

The British Retail Consortium's monthly report suggested sales were up 4.2% on a like-for-like basis in April on a year earlier as bank holiday shoppers bought furniture and snapped up clothing to suit the warmer weather.

But the numbers were distorted by the timing of Easter, which fell in March last year. The same holiday timing effect saw sales fall according to the report for March. Taking the last three months together to iron out distortions, like-for-like sales grew 0.3%, the weakest performance since December 2012.

Flooring and furniture sales grew at the fastest rate since April 2006, joining house textiles, clothing and footwear as strong performing categories.
According to the head of retail at KPMG, renewed confidence in the housing market is the reason why homeowners are making improvements to their properties. David McCorquodale said that although a late Easter had contributed to strong sales in April, the recovering economy was feeding through to non-food retail sales, which saw a 3.3% rise in the last quarter.

“Sales of furniture and flooring increased over the Easter break as consumers not only had the confidence to refresh their décor, but also to invest in big-ticket items,” he continued.

Retailers enjoyed an Easter boost in sales last month but it was not enough to prevent the worst underlying performance for more than a year.

The main drag came from food, with sales falling against a backdrop of supermarket discounting. Without food, like-for-like sales rose 2.2% over the three months to April.

"Price wars may be good news for consumers but mean that grocers have to urgently rethink business models to maintain margins," said David McCorquodale, head of retail at KPMG, the report's co-author. Looking ahead, he predicted consumers would continue to watch their spending closely.

BRC director general Helen Dickinson said that customers had “responded well to great deals and good ranges in children's clothes, DIY products and furniture” but said that consumers were still watching their spending very closely.

KPMG's McCorquodale added: "After splashing out at Easter shoppers may be more restrained in the forthcoming months as they keep a keen eye on cash. However, if we have fine weather and the good economic news keeps coming, this should give retailers the momentum they need to drive sales of summer stock."