BRC KPMG RETAIL SALES MONITOR OCTOBER 2020 Further …

BRC – KPMG RETAIL SALES MONITOR OCTOBER 2020

Further catch-up IN October but polarised sales Covering the four weeks 4 – 31 October 2020

Strictly Embargoed until 00.01 hrs – Tuesday 10th November 2020

Oct: like-for-like retail sales % change year-on-year

5.2% In October, UK retail sales increased 5.2% on a Like-for-like basis from October 2019, when they had decreased 0.9% from the preceding year*. In October, Like-for-like has been measured EXCLUDING temporarily closed stores but including Online sales.

Oct: total Retail sales % change year-on-year

4.9% On a Total basis, sales increased by 4.9% in October, against a decline of 0.3% in October 2019*. It is in line with the 3-month average growth of 4.9% and above the 12m average decline of 0.7%.

Aug – Oct: non-food LFL in-store growth % change year-on-year

-9.0% Over the three months to October, In-Store sales of Non-Food items declined 11.4% on a Total and 9.0% on a Like-for-like basis. This is better than the 12-month Total average decline of 19.6%. For October, the like-for-like excluding temporarily closed stores remained in decline.

Aug – Oct: total Food % change year-on-year

5.8% Over the three months to October, Food sales increased 5.2% on a Like-for-like basis and 5.8% on a Total basis. This is higher than the 12-month Total average growth of 4.2%. For the month of October, Food was in growth year-on-year.

Aug – Oct: Total Non-Food % change year-on-year

4.0% Over the three-months to October, Non-Food retail sales increased by 5.7% on a like-for-like basis and 4.0% on a Total basis. This is above the 12-month Total average decline of 4.7%. For the month of October, Non-Food was in growth year-on-year.

Oct: Non-food Online growth % change year-on-year

39.0% Online Non-Food sales increased by 39.0% in October, against a growth of 3.0% in October 2019*. This is in line with the 3-mth average of 39.2% and above the 12-mth average of 28.9%. Non-Food Online penetration rate increased from 31.7% in October 2019 to 42.3% this October.

* Note 2020 is a 53-week year in the ONS calendar: as a result of the extra week in January 2020, the comparable 2019 performances cited here may

differ from those published last year, due to the one-week shift in the comparison.

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Covering the four weeks 4 – 31 October 2020

Helen Dickinson OBE, Chief Executive | British Retail Consortium

“October saw another month of strong sales growth, with food, gifts and loungewear high on peoples’ shopping lists. Tightening restrictions across the United Kingdom and speculation towards the end of the month of an England-wide lockdown prompted customers to stock up on home comforts and food supplies. The disparity between online and in-store non-food sales widened, with the highest online penetration rate since June. Non-food stores once again experienced double-digit decline due to low footfall as more office workers returned to home working.

“During an incredibly challenging year for the industry, many retailers had finally thought that they were finding their footing. The new lockdown in England will now throw away this progress as we enter the crucial Christmas trading period and we estimate that £2bn of sales per week will be lost this month. It is therefore vital that retailers are able to trade from 3rd December and we are asking government to urgently provide clarity about the criteria for reopening and to ensure that affected businesses are supported in the coming months.”

Don Williams, Retail Partner | KPMG

“This is an impressive performance by retailers, especially given the tighter household restrictions in October, but testing times lie ahead.

“The gap between winners and losers is stark with home-related items, like furniture and technology, putting in a strong performance whilst the improvement in fashion sales was short lived. Online sales remain high and are set to grow further during Black Friday and lockdown. Not all retailers are in a position to take advantage of this shift in customer behaviour, which has been accelerated by circumstance and for many is now both choice and habit.

“The important ‘golden quarter’ is likely to be unrecognisable this year, with some retailers losing a month’s worth of trading opportunity. Capacity is also likely to be a significant challenge over the coming months as there is a limit to online delivery availability and social distancing has reduced the numbers of customers that can safely shop in store at any one time. In order to survive, retailers must give serious thought to how consumers will engage in the run-up to Christmas.

“Some retailers will thrive in the new environment, others will find it bleak. The locked-in step-up in online activity will undoubtedly lead to further investments in digital capability and partnerships. Digital strategies have never been more vital, but those strategies must be cost efficient too.”

Food & Drink sector performance | Susan Barratt, CEO | IGD

“Food and grocery sales continued to perform strongly in October, albeit marginally slower than in September. There was a clear uptick in sales at end of October with retailers benefiting from Halloween falling on a Saturday and shoppers reacting to the impending national lockdown with more than half of shoppers (55%) claiming to have stockpiled over the Halloween weekend. The closure of many out-of-home channels will almost certainly drive additional sales in retail in November.

“A second wave of COVID-19, the three-tier lockdown system in England, rising unemployment and uncertainty about EU exit have all contributed to IGD’s Shopper Confidence Index declining for the second month in a row, hitting its lowest level since May. Confidence is particularly low among lower affluence groups and shoppers in Wales and the North West. The new national lockdown in England will only impact shopper confidence further so expect savvy shopping tactics to intensify in the run up to Christmas.”

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MONTHLY YEAR-ON-YEAR GROWTH OF TOTAL RETAIL SALES*

Source: BRC-KPMG RSM (Includes Food data from IGD)

* Note: The 2019 figures have been recalculated to correspond to the same periods as those used in 2020, based on a

53-week year. LIKE-FOR-LIKE SALES: 3-MONTH AVERAGE % CHANGE YEAR-ON-YEAR


Note: Like-for-like has been measured EXCLUDING temporarily closed stores due to COVID-19 but

including Online sales

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Food Non-Food All Sales

LFL* TOTAL*

Oct 2020 5.2% 4.9%

Oct 2019* -0.9% -0.3%

Sep 2020 6.1% 5.6%

3m average 5.4% 4.9%

12m avg 3.1% -0.7%

3-MONTH AVERAGE

LFL TOTAL

Food 5.2% 5.8%

Non-food 5.7% 4.0%

All Sales 5.4% 4.9%

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Contents Overview 5

Performance by category 7

Food 8

Clothing 9

Footwear 10

Health & Beauty 11

Furniture 12

Home Accessories 13

House Textiles 14

Toys & Baby Equipment 15

Household Appliances 16

Computing 17

Other Non-Food 18

Online versus store data 21

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3M ROLLING AVERAGE YEAR-ON-YEAR GROWTH OVER FIVE YEARS


OVERVIEW

October saw very similar patterns than September, with growth in both Food and Non-Food leading to a Total year-on-year change of 4.9% overall, just a touch lower than September. One can now hope that the 2020 retail sales may end up level with 2019 overall. However, the picture is very contrasted depending on channels, geography, product categories, and customer income.

The mounting evidence of a second wave of COVID-19 put a break on the recovery of In-Store sales, as their decline stepped back down for the first time since April. The particularly wet weather didn’t help the footfall either. Meanwhile, Online growth has been stable at around 40% since July and was at 39.0% in October. However, the increase in Online penetration rate from 30.8% in September to 31.7% in October was consistent with the time of the year.

In terms of geography, the circuit breaker in Wales and the introduction of tier systems leading to local lockdowns meant that some areas fared better than others, with shopping districts in cities like London and Manchester among the worst hit.

On a 3-month basis, Food was up 5.8%, a continuation of the strong record observed since July, helped by some stocking up in the final week of the period in anticipation of a second lockdown. The positive momentum continued for Non-Food, with the 3-month average growth standing at 4.0% in October, its highest level since June 2014. This was despite the unseasonably mild weather putting a break on the sales of fashion ranges. TVs and computers were again the main drivers of the Non-Food performance.

There were also further signs of polarisation in terms of shopper types in October. On the one hand, the good performance of large ticket items suggested that people in work, who have been forced to accumulate savings during the lockdown, are spending on large ticket items to create a more luxurious home environment for themselves. On the other hand, shoppers on more precarious or even reduced income tended to hold on to their money, creating a mid-month lull and Pay Day boost more accentuated than usual for low ticket items and essential categories.

The second lockdown is throwing retail’s path to recovery into a precarious balance. Many retailers have saved on their marketing spend since the start of the pandemic, which they may be able to direct towards their Online channels in the final two months of the year. As there is not much alternative to spending while hospitality, leisure and travel are no available options, consumers might want to treat their loved ones with extra gifts this Christmas. This would certainly help the retailers’ fortune.

Anne Alexandre, RSM Manager

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FOOD SALES: 3-MONTH AVERAGE

NON-FOOD SALES: 3-MONTH AVERAGE

Source: BRC-KPMG RSM

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PERFORMANCE BY CATEGORY (TOTAL SALES) By Anne Alexandre, RSM Manager and James Hardiman, Analyst

Category up / down

Oct-20 Rankings (Total sales)

LFL TOT OCT -20 SEP-20 OCT -19 3M AVG 12M AVG

Computing 1 1 6 1 1

Household Appliances 2 2 4 2 2

Other Non-Food 3 3 11 3 3

Home Accessories 4 5 8 5 6

House Textiles 5 9 2 7 8

Jewellery & Watches 6 7 10 8 11

Food 7 6 7 6 4

Furniture 8 4 5 4 7

Toys & Baby Equipment 9 8 13 9 5

Health and Beauty 10 10 9 10 9

Stationery 11 12 12 11 10

Clothing 12 11 3 12 12

Footwear 13 13 1 13 13

Source: BRC-KPMG RSM (Including Food data from IGD)

OCT: CONTRIBUTION TO TOTAL SALES GROWTH BY CATEGORY

Source: BRC-KMG RSM (Includes Food data from IGD); in this chart, purple blocks represent negative contributions

2.3%

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FOOD TOTAL SALES ROLLING AVERAGE GROWTH: FOOD

FOOD

In the three months to October, Food growth accelerated to 5.8% year on year on a Total basis, which was a reversal of the slowing trend seen over the previous two months. The primary factor in this increase was the roll-out of the government’s three-tiered approach to social and work-related restrictions over the course of the month. As restrictions progressively tightened for many areas, there was a commensurate increase in consumers’ unwillingness to visit restaurants and pubs to eat out, which naturally worked to the benefit of both supermarkets and local food shops. However, there were signs of an increase in polarisation in terms of consumer spending power, as there was a reported increase in those having to wait for pay day before going for their big shop. Alcohol sales continued to perform well in stores, as people looked to stock up ahead of both Christmas and ever-increasing coronavirus-related restrictions. The last week of the month saw the strongest Food growth, helped by some stockpiling. Food price inflation also continued to play a starring role in the category’s growth, recorded at 1.2% for the three months to October by the BRC-Nielsen Shop Price Index (SPI). This resulted in real growth increasing to 4.6% for the three months, from September’s three-month average of 4.3%.

Alcohol sales continued to perform well ahead of both Christmas and increasing social restrictions

TOTAL SALES ROLLING AVERAGE GROWTH: NON-FOOD

TOTAL SALES ROLLING AVERAGE GROWTH: UK

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* Note: For the UK and Online graphs only, the 2019 figures have been recalculated to correspond to the same periods as those used in 2020, based on a 53-week year.



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CLOTHING CLOTHING: UK TOTAL SALES change*

CLOTHING: ONLINE SALES CHANGE*

THE MONTH OVERALL The fashion categories remained at the bottom of the rankings table last month, with Clothing in penultimate position. This was also the case for the three and twelve-month averages, pointing to the enduring effect of the pandemic. October recorded a steeper decline for the second consecutive month, as increased restrictions on socialising dampened demand for Clothing considerably. Once again it was formal wear that suffered, as the numbers of staff working from home increased towards the levels seen in the post-lockdown period. This coincided with the easing of the belated back to school period, which resulted in childrenswear falling back into decline. Women’s remained the worst performing segment. The weather was also not playing ball in October, as mild temperatures led to demand for warm outerwear falling away. However, some areas reportedly saw an increase in demand as the probability of a second lockdown loomed, none more than nightwear as pyjamas and dressing gowns flew off the shelves. Comfort was certainly king in October, as people prepared to wrap up warm in time for the long nights at home ahead.

CLOTHING: ONLINE PENETRATION RATE

CLOTHING: STORES SALES CHANGE

THE MONTH BY CHANNEL The overall downward trend was seen broadly equally by Online and In-store sales, as both took a step down in October. Some retailers tried to stimulate demand in the adult ranges through promotions with mixed results. The introduction and gradual escalation of the tiered system of coronavirus related restrictions across the country significantly hampered store sales, as town centres – where a high proportion of Clothing shops are located – were avoided even more than the preceding months. Demand Online was also dampened by the same effect, as the prospect of more time at home in the near future gave no incentive for people to update their warmer clothes. The Online penetration rate increased by 11.5 percentage points from last year, to 49.0% in October.

Comfort was king, as people prepared to wrap up warm in time for the long nights at home


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FOOTWEAR FOOTWEAR: UK TOTAL SALES change*

FOOTWEAR: ONLINE SALES CHANGE*

THE MONTH OVERALL The decline seen in Footwear sales steepened for the second consecutive month in October, which resulted in the category propping up the growth rankings table for the fifth month in a row. Children’s ranges fared better than the two adult ranges, but this is damning with faint praise as there was a significant drop off in demand across the board. As with Clothing, spending was more home-focussed as the nights grew longer, driving demand for slippers to keep warm in the colder months ahead. It was reported by a variety of retailers that this was putting unexpected pressure on their stock levels ahead of the usual winter peak for such items. On the negative side, adults formal ranges continued to see little demand, in line with the cancellation of this year’s party season. The wet weather drove good demand for wellies, especially for children.

FOOTWEAR: ONLINE PENETRATION RATE

FOOTWEAR: STORES SALES CHANGE

THE MONTH BY CHANNEL Online, the category only just made it into growth for the month, which was an improvement on the decline seen in September. In-store sales, however, saw a fall in performance for the second consecutive month. Mid-season sales were said to see good uptake for men’s ranges at the end of the month. Reportedly, the children’s segment experienced good growth Online. The Online penetration rate increased by 12.5 percentage points from the same point last year, to 56.0% in October.

The category propped up the growth rankings table for the fifth month in a row


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HEALTH & BEAUTY HEALTH AND BEAUTY: UK TOTAL SALES change*

HEALTH AND BEAUTY: ONLINE SALES CHANGE*

THE MONTH OVERALL The category saw a reversal of the improving trend seen over the last few months, recording a steeper decline than the preceding month in October. Within the category, the Health segment was the stronger performer for the month, with coronavirus case numbers increasing providing a boost to sales of hand sanitisers. Also, as the wet weather arrived towards the end of the month, cough & cold remedies saw an increase in popularity. On the Beauty products side of the category, the depth of discounting was reportedly lower than in previous years but. increasing social restrictions over the course of the month constricted demand. With the approach of the festive season, gifts and advent calendars became a larger proportion of the category.

HEALTH AND BEAUTY: ONLINE PENETRATION RATE

HEALTH AND BEAUTY: STORES SALES CHANGE

THE MONTH BY CHANNEL There were contrasting fortunes for the channels in October, with Online seeing an improvement over September, whereas In-store sales fell back into a steeper level of decline. The gradually increasing tier levels across the country throughout the month was the primary factor in the latter’s poor performance, as the category is particularly sensitive to footfall fluctuations and impulse purchasing on the high street. As a result, the Online penetration rate increased by 7.2 percentage points from last year, to 20.5% in October.

With the approach of the festive season, gifts and advent calendars became a larger proportion of the category


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FURNITURE FURNITURE: UK TOTAL SALES change*

FURNITURE: ONLINE SALES CHANGE*

THE MONTH OVERALL Furniture sales took a step back towards normality in October, with a lower rate of growth than in September. It was reported that demand remained healthy for both large and small items, but the star performer of the month was said to be storage options, as there was some stocking up to do ahead of the looming lockdown. Fitted Furniture was also reportedly in demand, as it was uncertain whether fitters would be allowed into homes come November. Larger items – while still performing well – saw weaker demand than in the previous few months, which was also highlighted by the GfK Consumer Confidence Index for Major Purchases, as it fell by 6 points from September to -27 in October.

FURNITURE: ONLINE PENETRATION RATE

FURNITURE: STORES SALES CHANGE

THE MONTH BY CHANNEL Online growth slowed somewhat in October, although it remains well above the pre-crisis normal levels. With stores open throughout the month, consumers were still able to visit and experience the item’s look and feel, before making their considered purchases online. In contrast, In-store sales fell back into decline in October, albeit against a stronger comparable month from 2019. As a result, the Online penetration rate increased by 8.8 percentage points from last year, to 49.0% in October.

Fitted Furniture was in demand, as it was uncertain whether fitters would be allowed into homes come November


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HOME ACCESSORIES HOME ACCESSORIES: UK TOTAL SALES change*

HOME ACCESSORIES: ONLINE SALES CHANGE*

THE MONTH OVERALL The festive season certainly came to the benefit of this category in October, primarily driven by the ongoing home-focus of consumer attention. Halloween’s arrival in the final day of the month may have not seen much uptake for Clothing this year, but the extra discretionary spend transferred to decorations for the home. Christmas decorations were in high demand also in October, with a variety of retailers stating that spending had been pulled forward considerably in comparison to previous years. Cooking & Dining Accessories also did well, suggesting people were hoping to be allowed to host, come Christmas. With fewer other events in the social calendar this winter, it seems as though homes will be more adorned with festive cheer than before.

HOME ACCESSORIES: ONLINE PENETRATION RATE

HOME ACCESSORIES: STORES SALES CHANGE

THE MONTH BY CHANNEL Surprisingly, Online saw a significant increase in growth from the rate seen in September, even though stores remained open throughout the period – albeit with many areas climbing the tiers as the month progressed. This was in no small part due to the extra effort by retailers to promote their Online Christmas shops this year in comparison to those gone by. In-store, sales fell back into a slight decline but remained broadly in line with last year’s more normal performances. The Online penetration rate increased by 8.2 percentage points from last year, to 30.2% in October.

Homes will be more adorned with festive cheer than before


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HOUSE TEXTILES HOUSE TEXTILES: UK TOTAL SALES change*

HOUSE TEXTILES: ONLINE SALES CHANGE*

THE MONTH OVERALL House Textiles reversed the slowing trend over the previous two months, to record its third strongest growth of the year, with a significantly improved performance in October. The category climbed four places in the growth rankings table from September, to fifth place in October. As with the other home-related categories, the increase in likelihood of a winter lockdown over the course of the month led to a commensurate increase in demand for home interior improvements. This benefited blankets and heavy duvets ahead of the cold months of the year ahead.

HOUSE TEXTILES: ONLINE PENETRATION RATE

HOUSE TEXTILES: STORES SALES CHANGE

THE MONTH BY CHANNEL The upturn in the category’s overall performance was mirrored by both channels in October, with both Online and In-store sales seeing an improved performance from that seen in September. However, the disparity between the channels continued, as Online saw significant growth once again and In-store remained in decline. The Online penetration rate increased by 9.6 percentage points from last year, to 47.5% in October.

Blankets and heavy duvets benefitted ahead of the cold months ahead


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TOYS & BABY EQUIPMENT TOYS & BABY EQUIPMENT: UK TOTAL SALES change*

TOYS & BABY EQUIPMENT: ONLINE SALES CHANGE*

THE MONTH OVERALL Last month, the category achieved its best performance since June. Growth of Toys & Baby Equipment accelerated in October, as families started to purchase Christmas presents early. Outdoor toys fared well thanks to the relatively mild weather. Nursery items may have benefitted from the anticipation of a second lockdown, as was seen in the first.

TOYS & BABY EQUIPMENT: ONLINE PENETRATION RATE

TOYS & BABY EQUIPMENT: STORES SALES CHANGE

THE MONTH BY CHANNEL October’s acceleration was driven by the improved In-Store performance more than the Online one, probably helped by some early promotional activity by supermarkets in preparation for Christmas. The Online penetration rate eased from September’s 58.5% to 52.8% in October, up 8.5 percentage points year-on-year.

October’s acceleration was driven by the improved In-Store performance more than the Online one


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HOUSEHOLD APPLIANCES HOUSEHOLD APPLIANCES: UK TOTAL SALES change*

HOUSEHOLD APPLIANCES: ONLINE SALES CHANGE*

THE MONTH OVERALL Household appliances kept a very high rate of growth in October, as the category placed second in the growth rankings table. This was also its position for the three and twelve-month averages. Demand was particularly good for large ticket items. Indeed, with restrictions on travel and leisure in place, the purchase of a large household appliance often came as an alternative treat for families. Small appliances also fared well, with kitchen items helped by the Great British Bake-off and a general appeal of small domestic appliances as Christmas presents.

HOUSEHOLD APPLIANCES: ONLINE PENETRATION RATE

HOUSEHOLD APPLIANCES: STORES SALES CHANGE

THE MONTH BY CHANNEL Household Appliances occupied third position in the Online rankings table, while remaining low in the In-Store table. The Online penetration rate increased by 15.9 percentage points from the same period last year, to 70.9% in October. With such a high share of Online and no restrictions on two-man deliveries in the upcoming lockdown, sales in the category should see off the second lockdown relatively unbruised.

With restrictions on travel and leisure in place, the purchase of a large household appliance often came as an alternative treat for families


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COMPUTING COMPUTING: UK TOTAL SALES change*

COMPUTING: ONLINE SALES CHANGE*

THE MONTH OVERALL Computing remained in top position of the growth rankings table in October but also for the three and twelve-month averages. Laptops were in high demand and some were in tight supply, due to worldwide allocations. The category continues to benefit from the blurring between business spend and consumer spend, as businesses are footing the bill for expenses made by their employees forced to work from home. The new iPhone 12 became available for pre-orders and was launched in the UK on 16 and 23 October respectively. This provided some extra stimulus to the category, if any was needed.

COMPUTING: ONLINE PENETRATION RATE

COMPUTING: STORES SALES CHANGE

THE MONTH BY CHANNEL Computing regained the top position in the Online growth rankings table as the share of Online sales remained the highest of all categories, at 73.4%, a 16 percentage points increase from October 2019. This keeps creeping up and the lockdown shouldn’t be an obstacle to sales for the category, as was observed in the first lockdown.

The category continues to benefit from the blurring between business spend and consumer spend


y-o

-y %

ch

an

ge

2019

2020


yo

y %

ch

an

ge

2019

2020

0.0%

20.0%

40.0%

60.0%

80.0%

100.0%

120.0%


2019

2020


yo

y %

ch

an

ge

2019

2020




18

OTHER NON-FOOD OTHER NON-FOOD**: UK TOTAL SALES change*

OTHER NON-FOOD**: ONLINE SALES CHANGE*

THE MONTH OVERALL The Other Non-Food category had another strong month in October, placing third again on the category growth rankings table for the month but also for the last 3 months and 12 months.

It was quite an achievement for In-Store sales to reach almost parity with October 2019

OTHER NON-FOOD**: ONLINE PENETRATION RATE

OTHER NON-FOOD**: STORES SALES CHANGE

** Note: The Online penetration rates, Online sales and Stores

sales graphs include Jewellery & Watches and Stationery. The UK

Total sales graph excludes Jewellery & Watches and Stationery.

THE MONTH BY CHANNEL All of the year-on-year growth of the category was absorbed by Online, which reached second position in our growth rankings table. Nonetheless, it was quite an achievement for In-Store sales to reach almost parity with October 2019. As Click & Collect is authorised during the new lockdown for England, it will be interesting to see whether that helps the overall performance of the category compared to the first lockdown. In October, the Online penetration rate increased by 10.9 percentage points from the same point last year, to 36.4%.


y-o

-y %

ch

an

ge

2019

2020


yo

y %

ch

an

ge

2019

2020

0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

60.0%

70.0%


2019

2020


yo

y %

ch

an

ge

2019

2020




19

OTHER NON-FOOD

Includes in particular:

Jewellery & Watches*

Jewellery & Watches reported growth for the second consecutive month, improving further on their September performance and posting their best growth since April 2017. As we approached Christmas, it seemed that shoppers were willing to use up some of their lockdown savings to treat their loved ones. Electricals & Electronics The outstanding performers were still TV sets in October, as the nights started earlier and more time was spent in front of the screens. Some retailers commented that this was leading to less promotions in the market. However, some price reduction on Airpods helped lift the segment, as those don’t come too often. There was good sales of smart watches and smart home hubs in the hope that they would make popular Christmas gifts again. Leisure Goods, Gaming, Books, CDs & DVDs Gaming showed another strong rise but the UK supply of the new consoles seems well below demand, limiting the pre-orders that could be placed in October. The new X Box series X and PS5 will be launched on 10 and 19 October respectively in the UK, but it looks like it will take some time before demand can be fulfilled. As people kept a clear focus on mending and improving their homes, paints, sealants, fittings and fixtures were in high demand. Books were very popular in October, as people prepared for the long winter nights of lockdown: it was the strongest growth of the Bookscan records we hold (from January 2011). For good measure, fitness and sport goods also showed healthy growth last month.

DEPARTMENT STORES Just as stores were starting to see the end of the tunnel and to recover healthy levels of sales, the second wave of the pandemic and its resulting measures in the UK reversed the trend. Wales introduced a “circuit-breaker” lockdown on 23 October, while a tier system was introduced in England on 15 October, followed by a lockdown from 5 November. Those announcements had the effect of curbing footfall in the second half of the month by anticipation. However, the last week of the period was inflated by some panic buying on food and early purchases of lockdown essentials and Christmas must-haves. The mostly wet weather of the month didn’t help footfall either. On the supply side, some retailers mentioned recurring shortages of some global items and mounting issues with some containers clogging ports.


y-o

-y %

ch

an

ge

2019

2020



20

MONTHLY RETAIL SALES: % CHANGE YEAR-ON-YEAR

MONTH 2018 2019 2019 (1) 2020

LFL TOTAL LFL TOTAL LFL TOTAL LFL (2) TOTAL

January 0.6 1.4 1.8 2.2 1.2 1.7 0.0 0.4

February 0.6 1.6 -0.1 0.5 2.6 3.2 -0.4 0.1

March 1.4 2.3 -1.1 -0.5 -3.5 -1.8 -3.5 -4.3

April -4.2 -3.1 3.7 4.1 2.0 2.4 5.7 -19.1

May 2.8 4.1 -3.0 -2.7 -2.2 -1.9 7.9 -5.9

June 1.1 2.3 -1.6 -1.3 -2.2 -1.6 10.9 3.4

July 0.5 1.6 0.1 0.3 0.3 0.5 4.3 3.2

August 0.2 1.3 -0.5 0.0 -0.8 -0.4 4.7 3.9

September -0.2 0.7 -1.7 -1.3 -1.3 -0.6 6.1 5.6

October 0.1 1.3 0.1 0.6 -0.9 -0.3 5.2 4.9

November -0.5 0.5 -4.9 -4.4 -1.3 -0.9

December -0.7 0.0 1.7 1.9 0.2 0.2

Jan-Oct average 0.3 1.4 -0.3 0.1 -0.6 0.0 0.3 1.4

Jan–Dec average 0.2 1.2 -0.5 -0.1 -0.5 -0.1 n/a n/a

Source: BRC-KPMG RSM (Includes Food data from IGD); Note (1) 2020 is a 53-week year in the ONS calendar: as a result of the extra week in January 2020, the comparable 2019

performances cited here may differ from those published last year, due to the one-week shift in the comparison. (2) From April 2020, the LFL guidance was to exclude stores that were

forced to close temporarily due to COVID-19 measures.

FOOD/NON-FOOD QUARTERLY ANALYSIS: 3-MONTH AVERAGE % CHANGE YEAR-ON-YEAR

3-MONTH AVERAGE

LIKE-FOR-LIKE (1) TOTAL

Food Non-Food All Sales Food Non-Food All Sales

Aug – Oct 0.5 -1.9 -0.8 1.6 -1.8 -0.3

Sep – Nov 0.3 -4.3 -2.2 1.3 -4.1 -1.7

Oct – Dec 19 0.0 -1.6 -0.9 0.7 -1.4 -0.4

Nov 19 – Jan 20 -0.1 -1.5 -0.8 0.6 -1.3 -0.4

Dec 19 – Feb 20 0.3 0.6 0.5 1.0 0.7 0.8

Jan – Mar 20 4.9 -6.7 -1.3 5.1 -6.6 -1.4

Feb - Apr 6.0 -4.5 0.3 4.5 -17.5 -7.5

Mar – May 8.7 -2.1 2.8 5.6 -21.8 -9.4

Apr – Jun 7.3 9.5 8.4 3.8 -15.0 -6.4

May – Jul 20 8.2 7.9 7.9 6.1 -4.3 0.4

Jun – Aug 20 6.3 7.7 7.0 5.9 1.4 3.5

Jul – Sep 5.1 5.2 5.1 5.6 3.2 4.3

Aug – Oct 5.2 5.7 5.4 5.8 4.0 4.9


(1) From April 2020, the LFL guidance was to exclude stores that were forced to close temporarily due to COVID-19 measures.



21

Online versus store Data



22

ONLINE SALES GROWTH (NON-FOOD): % CHANGE YEAR-ON-YEAR

Source: BRC-KPMG RSM: Online: online sales of non-food goods (including mail and phone orders

3-MONTH AVERAGE: CONTRIBUTION TO NON-FOOD SALES GROWTH BY CHANNEL % CHANGE YEAR-ON-YEAR


-20%

-10%

0%

10%

20%

30%

40%

50%

60%

70%

Oct

-18

No

v-1

8

De

c-1

8

Jan

-19

Fe

b-1

9

Mar

-19

Ap

r-1

9

May

-19

Jun

-19

Jul-

19

Au

g-1

9

Se

p-1

9

Oct

-19

No

v-1

9

De

c-1

9

Jan

-20

Fe

b-2

0

Mar

-20

Ap

r-2

0

May

-20

Jun

-20

Jul-

20

Au

g-2

0

Se

p-2

0

Oct

-20

ye

ar-o

n-y

ear

% c

han

ge

Online 12m average

-40.0%

-30.0%

-20.0%

-10.0%

0.0%

10.0%

20.0%

30.0%

Online

Stores

All Channels

NON-FOOD IN-STORE % CHANGE YEAR-ON-YEAR

LFL TOTAL

Aug - Oct 20

-9.0% -11.4%

Aug - Oct 19

-3.7% -3.6%

Jul - Sep 20 -9.5% -12.3%

12m avg -10.1% -19.6%

NON-FOOD

GROWTH ONLINE*

UK TOTAL

Oct 2020 39.0% n/d

Oct 2019 3.0% n/d

Sep 2020 36.7% n/d

3m avg 39.2% 4.0%

12m avg 28.9% -4.7%

n/d: cannot be disclosed



23

BRC-KPMG NON-FOOD RETAIL SALES YEAR-ON-YEAR GROWTH: MONTHLY GROWTH OF ONLINE NON-FOOD RETAIL SALES*

Source: BRC-KPMG RSM. *2020 is a 53-week year in the ONS calendar: as a result of the extra week in January 2020, the comparable 2019

performances cited here may differ from those published last year, due to the one-week shift in the comparison

3M ROLLING AVERAGE GROWTH OF NON-FOOD SALES


0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

60.0%

70.0%


y-o

-y %

ch

an

ge

2020

2019

-60%-50%-40%-30%-20%-10%

0%10%20%30%40%50%60%70%

Oct

-18

No

v-1

8

De

c-1

8

Jan

-19

Fe

b-1

9

Mar

-19

Ap

r-1

9

May

-19

Jun

-19

Jul-

19

Au

g-1

9

Se

p-1

9

Oct

-19

No

v-1

9

De

c-1

9

Jan

-20

Fe

b-2

0

Mar

-20

Ap

r-2

0

May

-20

Jun

-20

Jul-

20

Au

g-2

0

Se

p-2

0

Oct

-20

Online Non-Food sales Total Non-Food sales In-Store Non-Food sales



24

OCT: ONLINE PENETRATION RANKINGS BY CATEGORY


Note: Online sales in the Monitor include all distance sales, notably mail and phone orders

TOTAL NON-FOOD SALES: WEIGHTED ONLINE PENETRATION


57.4%

55.0%

43.5%

44.3%

40.2%

37.5%

37.9%

31.7%

25.5%

22.0%

13.3%

73.4%

70.9%

56.0%

52.8%

49.0%

49.0%

47.5%

42.3%

36.4%

30.2%

20.5%

0% 20% 40% 60% 80%

Computing

Household Appliances

Footwear

Toys & Baby Equipment

Furniture

Clothing

House Textiles

TOTAL

Other Non-Food^

Home Accessories

Health and Beauty

2020

2019


2019 29.5 29.1 29.3 29.9 31.4 33.1 29.7 29.0 30.8 31.7 33.8 34.5

2020 30.6 31.1 43.5 69.9 61.9 50.5 42.0 39.3 40.1 42.3

-

10.0

20.0

30.0

40.0

50.0

60.0

70.0

80.0

2019

2020

NON-FOOD ONLINE PENETRATION RATE

ONLINE AS % OF TOTAL

Oct 2020 42.3%

Oct 2019 31.7%

Sep 2020 40.1%

3m average 40.5%

12m average 43.0%



25

NON-FOOD ONLINE RETAIL SALES

MONTH

TOTAL GROWTH % CHANGE YOY

ONLINE PENETRATION AS % OF TOTAL SALES

CONTRIBUTION TO TOTAL NON-FOOD GROWTH (PERCENTAGE POINT)

MONTHLY* 3M

AVERAGE* MONTHLY

3M AVERAGE

MONTHLY 3M

AVERAGE

Oct 5.0 3.4 31.7 30.6 1.8 0.8

Nov 3.4 3.9 33.8 32.0 -3.9 -0.6

Dec 2019 6.5 5.0 34.5 33.4 4.6 1.1

Jan 2020 2.5 4.3 30.6 32.9 0.9 0.9

Feb 3.6 4.7 31.1 32.1 1.3 2.4

Mar 18.8 8.6 43.5 35.3 5.7 2.8

Apr 57.9 26.1 69.9 47.8 17.1 7.9

May 60.2 43.5 61.9 57.3 20.3 13.7

Jun 48.2 54.9 50.5 60.0 17.9 18.4

Jul 41.0 49.7 42.0 51.4 12.9 17.1

Aug 42.4 44.2 39.3 44.5 13.4 15.0

Sep 36.7 39.7 40.1 40.4 12.0 12.7

Oct 39.0 39.2 42.3 40.5 13.0 12.8

Source: BRC-KPMG Retail Sales Monitor. * 2020 is a 53-week year in the ONS calendar: as a result of the extra week in January 2020, the

comparable 2019 performances cited here may differ from those published last year, due to the one-week shift in the comparison

NON-FOOD STORE THREE-MONTH AVERAGE RETAIL SALES YEAR-ON-YEAR CHANGE

THREE MONTHS ENDING TOTAL % CHANGE YOY LFL % CHANGE YOY

Oct -3.6% -3.7%

Nov -5.2% -5.5%

Dec 2019 -3.5% -3.8%

Jan 2020 -3.0% -3.3%

Feb -1.8% -1.9%

Mar -13.0% -13.0%

Apr -36.0% -17.3%

May -50.3% -21.9%

Jun -46.8% -11.3%

Jul -29.3% -11.3%

Aug -17.8% -8.5%

Sep -12.3% -9.5%

Oct -11.4% -9.0%

Source: BRC-KPMG Retail Sales Monitor



26

SECTOR PERFORMANCE: ONLINE SALES GROWTH

CATEGORY

SALES UP /

DOWN OCT 2020

GROWTH RANKINGS

OCT 2020 SEP 2020 OCT 2019 3M AVG 12M AVG

Computing 1 2 6 1 1




Health & Beauty 5 4 4 4 3


Furniture 7 5 5 6 8


Clothing 9 9 3 9 9

Footwear 10 10 1 10 10


OCT: CONTRIBUTION TO NON-FOOD ONLINE SALES GROWTH BY CATEGORY




27

SECTOR PERFORMANCE: STORE TOTAL SALES GROWTH

CATEGORY

SALES UP /

DOWN OCT 2020

GROWTH RANKINGS

OCT 2020 SEP 2020 OCT 2019 3M AVG 12M AVG




Furniture 4 1 6 2 4


Health & Beauty 6 4 7 5 3

Computing 7 9 9 7 8


Clothing 9 8 3 9 9

Footwear 10 10 1 10 10


NON-FOOD STORE THREE-MONTH AVERAGE RETAIL SALES YEAR-ON-YEAR CHANGE (%)


-60.0%

-50.0%

-40.0%

-30.0%

-20.0%

-10.0%

0.0%

Oct

-19

No

v-1

9

De

c-1

9

Jan

-20

Fe

b-2

0

Mar

-20

Ap

r-2

0

May

-20

Jun

-20

Jul-

20

Au

g-2

0

Se

p-2

0

Oct

-20

TOT LFL



28

NOTES The BRC-KPMG Retail Sales Monitor measures changes in the actual value (including VAT) of retail sales, excluding automotive fuel. The Monitor measures the value of spending and hence does not adjust for price or VAT changes. If prices are rising, sales volumes will increase by less than sales values. In times of price deflation, sales volumes will increase by more than sales values.

Retailers report the value of their sales for the current period and the equivalent period a year ago. These figures are reported both in total and on a ‘like-for-like’ basis. Total sales growth is the percentage change in the value of all sales compared to the same period a year earlier. The total sales measure is used to assess market level trends in retail sales. It is a guide to the growth of the whole retail industry, or how much consumers in total are spending in retail – retail spending represents approximately one-third of consumer spending. It is this measure that is often used by economists. Many retailers include distance sales as a component of total sales.

‘Like-for-like’ sales growth (LFL) is the percentage change in the value of comparable sales compared to the same period a year earlier. It excludes any spending in stores that opened or closed in the intervening year, thus stripping out the effect on sales of changes in floorspace. Many retailers include distance sales as a component of like-for-like comparable sales. The like-for-like measure is often used by retailers, the city and analysts to assess the performance of individual companies, retail sectors and the industry overall, without the distorting effect of changes in floorspace.

From April 2020, the LFL guidance was to exclude stores that were forced to close temporarily due to COVID-19 measures from both the current period and the equivalent period a year ago. Online was considered open all the time. The majority of retailers could comply but some couldn’t exclude temporarily closed stores from their LFL figures.

Online (including mail order and phone) sales of non-food are transactions which take place over the internet, or via mail order or phone. Online sales growth is the percentage change in the value of online sales compared to those in the same period a year earlier. It is a guide to the growth of sales made by these non-store channels. It should be noted that online sales are still a small proportion of total UK retail sales.

Penetration is the proportion of sales attributed to the online channel (including mail order and phone). Penetrations are calculated category by category as online sales submitted by participating retailers relative to total sales those retailers submit to the BRC-KPMG Retail Sales Monitor. Participants who do not sell online (or through non-store channels) are included but participants who do sell online but do not submit their online sales are excluded.

The responses provided by retailers within each sales category are weighted (based on weightings derived from the ONS Family Spending survey) to reflect the contribution of each category to total retail sales, thus making it representative of UK retail sales as a whole. Category weightings for Online and In-Store growth and contribution to growth are derived from the UK weightings. The methodology used for weightings is revised from time to time. Because the figures compare sales each month with the comparable period last year, a seasonal adjustment is not made. However, changes in the timing of Bank Holidays and Easter can create distortions, which should be considered in the interpretation of the data.

As well as receiving sales value direct from the retailers in the scheme the BRC-KPMG Retail Sales Monitor also receives food and drink sales value data from the IGD’s Market Track Scheme.

In its role as sponsor of the BRC-KPMG Retail Sales Monitor, KPMG is responsible for the aggregation of the retail sales data provided by the retailers on a weekly basis. This data consists of the relevant current week’s sales data and comparative sales figures for the same period in the prior year. The aggregation has been performed by KPMG on data for periods following 2 April 2000 and equivalent prior periods. The accuracy of the data is entirely the responsibility of the retailers providing it. The sponsorship role has been performed by KPMG since 10 April 2000 and the same for the aggregation of comparative sales figures for the period from 2 April 2000 it is not responsible for the aggregation of any data included in this Monitor relating to any period prior to 2 April 2000.

The commentary from KPMG is intended to be of general interest to readers but is not advice or a recommendation and should not be relied upon without first taking professional advice. Anyone choosing to rely on it does so at his or her own risk. To the fullest extent permitted by law, KPMG will accept no responsibility or liability in connection with its sponsorship of the Monitor and its aggregation work to any party other than the BRC.

© Copyright British Retail Consortium and KPMG (2014). The contents of this report and those of all ancillary documents and preparatory materials are the sole property of BRC and KPMG and are not to be copied, modified, published, distributed or commercially exploited other than with the express permission of BRC or for the purposes of journalistic comment and review. All rights reserved.



29

MEDIA ENQUIRIES

The November 2020 Monitor, covering the four weeks 1 – 28 November 2020, will be released at 00.01am on Tuesday 8 December 2020. The data is collected and collated for the BRC by KPMG.

The British Retail Consortium (BRC) is the UK’s leading retail trade association. It represents the full range of retailers, large and small, multiples and independents, food and non-food, online and store based. SPONSORED AND ADMINISTERED BY KPMG LLP, a UK limited liability partnership, operates from 22 offices across the UK with approximately 16,300 partners and staff. The UK firm recorded a revenue of £2.338 billion in the year ended 30 September 2018. KPMG is a global network of professional firms providing Audit, Tax, and Advisory services. It operates in 154 countries and has 200,000 professionals working in member firms around the world. The independent member firms of the KPMG network are affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity. Each KPMG firm is a legally distinct and separate entity and describes itself as such. FOOD DATA SUPPLIED BY IGD is an education and training charity for the food and grocery industry that undertakes research for the benefit of the public. Our in-depth understanding of shoppers, retailing and supply chains is supported by our knowledge of broader topics affecting the industry – health, nutrition, sustainability and economics among them. This gives us unparalleled insight that can help identify opportunities to improve performance and tackle business challenges. Our reach is global, with experts based in the UK, Singapore and North America. We invest the net income we make from selling our expertise back into our charitable activities.

British Retail Consortium 2 London Bridge London SE1 9RA T 020 7854 8900 W www.brc.org.uk

Tom Holder Media Relations Officer T 0207 854 8924 M 0777 52382432 E [email protected]

KPMG 15 Canada Square London E14 5GL T 020 7311 1000 W www.kpmg.co.uk

Emma Murray PR Manager T 0207 694 6506 M 07920 870 623 E [email protected]

IGD Grange Lane Letchmore Heath Watford, WD25 8GD T 01923 857141 W www.igd.com

Laura John, Corporate Communications Manager T 01923 851986 M 07453 018505 E [email protected]

mailto:[email protected]



30

DATA ENQUIRIES

Detailed weekly data by category is available to retailers who contribute to the monitor:

If you would like to participate in the Retail Sales Monitor, please contact: Anne Alexandre 0207 854 8960 [email protected]

James Hardiman, Analyst T 0207 854 8970 E [email protected]

British Retail Consortium Suite 60, 4 Spring Bridge Road Ealing. W5 2AA. T 020 7854 8900 W www.brc.org.uk

Anne Alexandre RSM Manager T 0207 854 8960 E [email protected]

mailto:[email protected]

Documents

BRC KPMG RETAIL SALES MONITOR OCTOBER 2020 Further …