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QSM Q3 2019 – Summer sales slump

Sales were up for Cards, Stationery, Crafts and Hobbies, Department Store and Books & Toys, Music, Computer/Telecoms independent retailers
between July and September 2019, but all other sectors have seen a drop.

The overall picture from Bira’s exclusive Quarterly Sales Monitor (QSM) for the third quarter of 2019 is one of disappointment, with the vast majority of the figures showing a decline when compared to the previous quarter and Q3 2018. Only three out of the twelve sectors surveyed reported a positive performance during the quarter, with five out of twelve showing a decline when compared to Q3 2018. Overall, 42.33% of respondents reported a higher performance for Q3, which although is a minor improvement on Q2 (41.07%), is down significantly from Q1 2019 (51.75%) and Q3 2018 (48.53%). The overall performance average for the quarter shows a fall of -2.05% for retailers, compared to the same period last year.

Sales of cards, stationery, crafts and hobbies items were higher for the third quarter of the year, with the sector seeing a +3.15% higher performance against Q3 last year. Department store retailers had a strong quarter, reporting an overall average performance of +2.08% which is a significant improvement on both Q2 (-4.06%) and Q3 2018 (-3.82%). Finally, sales of books, toys, music, computers and telecom products were high for Q3, as respondents from the sector reported a performance of +1.42%.

The worst performing sector in the QSM was Clothing & Footwear which was down -4.85% on Q3 2018. After a positive start in Q1 (+0.33%), this is the second consecutive quarter that the sector has reported a drop in sales. Other struggling sectors include gifts, glass, china, jewellery, accessories and luggage retailers and DIY & hardware stores which were down by -3.36% and -2.43%.

Northern Ireland was the best performing region with retailers reporting a performance of +0.33%. This represents a great recovery for the area as retailers in the region reported a performance of -3.17% in Q2 2019 and -5.08% in Q3 2018. Retailers in the North West have continued to struggle, showing a decline of -2.76% which is down on Q2 (-1.99%). Retailers in the South of the United Kingdom have also struggled, with respondents in the South East/London and South West reporting performances of -2.81% and -2.08%.

It is clear from respondents that several issues are causing serious concern. Further, prolonged Brexit uncertainty is still one of the biggest and it is damaging consumer and business confidence. 59.07% of respondents are facing modest margin pressures, due to a weaker Pound as a result. Other ongoing issues such as business rates, rising rents, parking and online selling are still concerns and as such, 53.49% of respondents are feeling anxious about the year ahead.

Andrew Goodacre, Bira’s CEO said: “The latest figures from the third QSM of 2019 reflect a difficult quarter for independent retail businesses. Although the year started in a more positive manner, only 42.3% of respondents have reported a positive performance. Furthermore, to see an overall drop of 2.05% is worrying and reflective of the tough times retailers are facing.

The survey and results were published before the announcement of the General Election, and it is perhaps fair to say that the results for the quarter would be different had we known about it and the further Brexit delay, beforehand. An election just before the busiest period of the year will almost certainly further impact business and consumer confidence in the months ahead.

These results merit a positive response from national and local governments. Having called an election pre-Christmas is not good news for the high street, and so we are pleased to see positive commitments to reform business rates once the election is complete – Bira would like this reform to be a priority in 2020. We are also pleased with the Conservative commitment to increase the current rates discount to 50% in 2021 for the smaller retail premises. Bira has been campaigning since 2018 for the introduction of a £12,00 rates free allowance, and this would be equivalent to a 50% discount. Again, Bira would like to see this commitment adopted by all political parties and confirmed as soon as possible after the election result.

As always, Bira will continue to fight for a better deal 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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For more on the Quarterly Sales Monitor