September Cycle Retail Sales Growth Slows
Posted on 15 Oct 2009
According to the BRC - KPMG retail sales monitor, September like for like sales rose by 2.8%, with non-food sectors improving their performance compared with food retailers in the month. Against this background Stephen Robertson, Director General, British Retail Consortium warned "the results are clearly not a sign of underlying strength in consumer spending, given the volatility in performance - by sector, by retailer and by week for individual retailers."
Cycle retail sales grew by just 0.8% in September on a like for like basis, but whereas the general UK retail sector was already suffering from a loss of consumer confidence in September 2008, as turmoil hit the financial markets, the specialist cycle retail sector was flying. September 2008 sales were 25% up on 2007 and last month's performance must be viewed in this light. Over the past 2 years cycle retail was well ahead of the UK retail sector in September.
However, Robertson isn't the only one cautious about the future. In the past few weeks M&S chairman Sir Stuart Rose stated "there are absolutely no green shoots. I have not seen them and we all need to soldier on." Retail supremo Sir Philip Green commented "the market place remains extremely challenging. It's far too early to call a recovery", whilst J Sainsbury chief executive, Justin King warned "there will be a little growth in the next few quarters, but the direction of travel will be at best flat rather than upwards".
There is an evident consensus that trading remains fragile, something borne out by cycle sector quarterly trading trends: 2009 Q1 sales grew 5.8%; Q2 by 3.7%; Q3 by 3.5%. Monthly sales performance has been positive, but lumpy after a poor May and there is no established growth' trend' in the specialist cycle market yet.
September Cycle Retail Fact File
- September like for like core sales increased 0.8% vs. 2008 (Aug 3.7%; Jul 5.8%; Jun 2.2%; May -7.1%; April 19.4%; Mar 22.6%; Feb -9.7%; Jan 0.8%)
- 31% of retailers reported sales UP by more than 20% in September 09 vs. 08 (August 30%; July 23%; June 26%)
- 9% of retailers reported sales UP by between 10% - 20% in September 09 vs. 08 (August 15%; July 15%; June 16%)
- 12% of retailers reported sales UP by between 1% - 10% in September 09 vs. 08 (August 14%; July 15%; June 16%)
- 16% of retailers reported sales DOWN by between 1% - 10% in September 09 vs. 08 (August 11%; July 17%; June 15%)
- 12% of retailers reported sales DOWN by between 10% - 20% in September 09 vs. 08 (August 13%; July 13%; June 13%)
- 20% of retailers reported sales DOWN by more than 20% in September 09 vs. 08 (August 17%; July 17%; June 14%)
Perhaps the most telling comments are BRC's regarding volatility of individual retailer performance. The variance in cycle retailer performance remains wide and deepening:
The overall increase in the growing businesses was 22.5% vs. September 08 (22.6% August; 26.2% July; June 22.8%)
The overall decrease in the shrinking businesses was -19.7% vs. September 08 (August -18.3%; July -17.7%; June -17.6%)
Did Sir Stuart Rose put his finger on the differential in retailer performance when he stated "the recession came fast, it came deep, it came globally. It will favour those who are strong, nimble and bold. It will punish those who are weak and feeble"?
With Halfords reporting a like for like sales growth of just 1.7% in the past 6 months including cycle to work, the specialist retail sector can be comforted that it is strongly outperforming the leading sector corporate retailer.
The Wider Picture
- 2009 year to date like for like core sales growth is 4.1%
- Quarter 1 2009 like for like sales growth was 5.8%
- Quarter 2 2009 like for like sales growth was 3.7%
- Quarter 3 2009 like for like sales growth was 3.5%
- Halfords Q3 2009 like for like sales growth was just 2.2%
These performance figures were derived from over 280 independent cycle retail businesses and workshops throughout the UK, representing c335 shop fronts ranging in size from annual turnovers of £25k to £3m. The performance figures apply to core like for like retail sales only; they do not include sales achieved via retail finance, cycle to work schemes or other non-core sales transactions, which will increase growth rates accordingly. No internet/mail order only businesses participated in this research
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