UK Retailers has recently faced a massive sales decline in more than two decades after the weather conditions affected the household budgets of consumers. The sector also faced the effect of the sharp cut in consumer spending behavior reported during the Easter season
The latest report from the British Retail Consortium (BRC) and KPMG revealed a 3.1% sales slump in April. This was the biggest plunge since 1995.
“The first glimpse of summer may have temporarily lifted clothing and footwear, but non-food sales overall continue to be weak. Consumers’ discretionary spending power remains under pressure and the reality is, that with only a gradual return to solid growth in real incomes expected, the market environment is likely to remain extremely challenging for most retailers.” Chief Executive of BRC Helen Dickinson told reports.
Retailers also faced numerous problems aside from the reported case of consumer spending. One of these is the higher labour costs which rooted from the minimum wage increase. Aside from that, the e-commerce effect also factored to the drop which changed the consumer behavior drastically.
“With much of the spending in preparation for the bank holiday weekend falling in March this year, a record low in sales growth, in contrast to last year’s record high, does not come as a surprise. However, even once we take account of these seasonal distortions, the underlying trend in sales growth is heading downwards.” Dickinson added.
Additionally, it was reported that the sector experienced year-on-year spending increase of 3.4 percent last month after March’s weak data. However, this didn’t help the decline as it still managed to result to the same data as reported.
“Retailers have got their work cut out to overcome seemingly endless obstacles, whether it be unpredictable weather or the introduction of new regulation, like GDPR (the EU’s General Data Protection Regulation).” head of retail of KPMG, Paul Martin told reports.
“The upcoming months will provide a number of opportunities for retailers to drive sales and navigate this assault course, including bank holidays, World Cup and of course the royal wedding, although it is clear that trading will remain challenging.”
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