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QSM Q1 2019 – An encouraging start to the year

Sales were up for Cookshop & Housewares, Clothing & Footwear and Furniture, Floor Coverings, Beds and Soft Furnishings
independent retailers between January and March 2019, whilst Health Store and Department Stores struggle.

The overall picture from Bira’s exclusive Quarterly Sales Monitor (QSM) for the first quarter of 2019 is one of encouragement, with many of the figures showing an improvement when compared to the previous quarter and Q1 2018. Six of the twelve surveyed reported a positive average performance during the quarter, with ten out of the twelve showing an improvement when compared to Q1 2018. Overall, 51.75% of respondents reported a higher performance for Q1 which is up on Q4 2018 (46.43%) and is a clear improvement on Q1 2018 (42.56%).

Furniture, floor coverings, beds and soft furnishings sales were higher for the first quarter of the year, with the sector seeing a +4.38% higher for the first quarter of the year, with the sector seeing a +4.38% higher performance against Q1 last year. The New Year coupled with a milder winter may have led to higher sales of cookshop & houseware products as well as clothing and footwear products as respondents in these sectors showed clear improvements of +2.07% and +0.33% when compared to Q1 last year (-1.45%) and (-3.26).

The worst performing sector in the QSM was Gifts, Glass, China, Jewellery, Accessories and Luggage which was down -5.07% on Q1 2018. As one of the stronger performing sectors in the last quarter, it is perhaps not surprising that sales of gifts etc. dropped post-Christmas. Other struggling sectors include health stores as well as department store retailers, which were both down by -4.03% and -3.75% respectively. The drop for health store retailers is stark, given how strongly it performed during Q1 last year (+2.57%).

The North West and Wales were the best performing regions with both continuing to thrive from a strong end to 2018 with retailers being +4.54% and +7.28% up on Q1 last year. Retailers in the South East/London showed a significant recovery when compared to Q4, with a +0.51% increase. Retailers in Scotland and the South West had a more difficult time, showing declines of -3.15% and -2.52% respectively. Overall, seven of the nine regions showed an improvement on the previous quarter.

Despite the encouraging figures and signs of improvement, several issues are still causing concern for retailers. Brexit has once again been highlighted by respondents as a concern and it is clearly having an effect with 60.31% of retailers facing modest margin pressures, due to a weaker Pound as a direct result. Other factors such as rising wages, pension increases, and rates were also highlighted by respondents as concerns as this is reflected in the survey with 54.45% of retailers feeling anxious about the year ahead.

Andrew Goodacre, Bira’s CEO said: “The latest figures from the first QSM of 2019 reflect an encouraging start to the year for independent businesses after what was a disappointing end to 2018. To see that just over half of the respondents have reported a higher performance average as well as a drop in significant margin pressure when compared to the last quarter, is a much needed and welcome start to the year. Despite the positive figures, there are still challenges facing retailers that require action from the Government, with the delay to Brexit being one of the biggest – we need clarity on the outcome before October. The smaller independent retail businesses have been helped with a 30% reduction in business rates and we now need the Government to start spending the £675 million high street fund to help bring confidence back to our high streets. As always, Bira will continue to fight the corner for independent businesses across the UK and I encourage all members to complete our surveys, to help us do this.”

About the QSM
We run the Quarterly Sales Monitor four times a year and along with the report, it is the only survey of its kind that reflects the independent retail industry in the UK. The report features full analysis from the survey as well as all member comments. All reports are then used to influence the media and Government through our Legal and Parliamentary Affairs Committee (LPAC), with all participants receiving a copy of the results.

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