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How much is inflation masking healthy growth for the sector?
Paul Martin, UK Head of Retail at KPMG, said:
“Retail sales held steady in April with 5% growth on last year, but against a background of higher inflation year on year, masking how much is actually healthy growth for the sector.
It was a mixed bag for the high street, with sales of footwear, food and jewellery performing strongly whilst more categories slipped into negative territory as clothing and computing continued to witness declining sales. Online retailers continued to feel the pressure in April, with both sales growth and penetration rates falling as the market rebalances after the pandemic and consumers choose to bargain hunt in store.
Consumer demand has so far been fairly resilient to the twin drags of high inflation and high interest rates, but as government energy support comes to an end for many, savings start to dwindle and other household bills rise, it is likely that the next few months will continue to be challenging as the consumer tank empties. Much hinges on whether soaring food inflation can be bought under control enough to allow consumers to comfortably start spending again on non-essential items.
Retailers will be hoping that the Coronation coupled with a month full of bank holidays and inflation levels starting to head in the right direction will boost consumer confidence significantly enough to start to see real, profitable growth.”
The BRC KPMG Retail sales monitor is one of the UK’s most timely, and accurate performance indicators for UK sales. Read the full report complete with sales data from the British Retail Consortium.
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