Retailers “waiting for summer” says BRC

With multiple bicycle company financial statements bemoaning the slow start to spring weather (as well as too much inventory on shelves), the broader world of retail is also looking to the summer for a change in fortunes.

The British Retail Consortium’s April sales numbers revealed a modest increase in like-for-like sales (up 5.2% in April, vs decline of 1.7% in April 2022), which was above the three-month average growth of 5%. However, prolonged inflation meant that volumes were down, emphasising the pricing pressures that consumers are currently contending with, often on essential items like food.

Another area of essential expenses, getting around, saw similar inflationary pressures. With arguably mixed messaging from the government on support for sectors like electric vehicles, those opting for getting around by electric-powered cars have been clobbered by stubbornly high energy bills and factors such as those pinpointed by Which?, which found Geniepoint electric car chargers are now twice as expensive as petrol and diesel.

Helen Dickinson OBE, Chief Executive of the British Retail Consortium noted that poor weather may have left customers thinking twice before investing in discretionary purchases, like summer clothing – or indeed activities often associated with better weather, like cycling.

“Retailers hope sales will improve over the warmer summer months, especially as consumer confidence stabilises and inflation begins to ease. However, they continue to face huge cost pressures from a tight labour market, high energy prices, and other rising input costs, with many retailers reporting lower profits this year as a result. Government needs to ensure that any additional regulatory cost burdens are kept to a minimum as these add to inflation.”

Paul Martin, UK Head of Retail at KPMG, added: 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 brought 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.”

For more specific cycle retail data, there’s CIN’s own Market Data, which contains a wealth of independent bicycle retailer-specific information. Find out more via Frazer@cyclingindustry.news