Olympics slows down retail sales

Channel News

Retail analysts say they aren’t surprised

The Olympics failed to boost retail sales, with the month of August identified as the worst for sales growth this year, the British Retail Consortium has found.

However, retail analysts have said the results aren’t a surprise.

UK retail sales values were down by 0.4 percent on a like-for-like basis from August 2011, when they were down 0.6 percent on the preceding year. On a total basis, sales were up 1.6 percent, against a 1.5 percent rise in August 2011.

The organisation said that excluding the Easter anomaly, these were both the lowest since November 2011, driven by particularly weak non-food sales as the feelgood factor from the Olympics failed to inspire spending.

There was a mild boost to food sales in the form of party food and drink, but the net effect of the Games was minimal as lower footfall in London was offset by a better performance in the rest of the country, it said.

The most noticeable impact from the Olympics was felt online which saw growth of just 4.8 percent in August – the lowest since the Monitor started collecting data on this in October 2008.

Stephen Robertson, Director General, British Retail Consortium, said: “There’s no evidence here of any Olympic boost to retail sales overall. Sadly, apart from April – distorted by Easter timings – August saw the worst sales growth this year.

“Hot weather and the Olympics did help sales of party food and drink but that was more than offset by a really weak performance for non-food goods.

“It’s clear people were absorbed by the magnificent Olympics and had little interest in shopping, especially for major items. Usually-reliable online sales suffered, putting in the worst sales growth since we started the measure four years ago. Some retailers told us online activity was particularly thin in the evenings. If people weren’t watching television they were more likely to be following the sport on PCs and mobile devices than shopping.

“As summer gives way to the all-important Christmas run-up, retailers will be hoping sales that didn’t happen in August have been postponed and not lost entirely.”

Helen Dickinson, Head of Retail, KPMG, said: “Retailers’ hopes that the Olympics would inspire a pickup in spending were dashed as shoppers stayed away from the high street and enjoyed the sporting spectacle from their armchairs. While, without doubt, the Olympics brought a much needed boost to consumer confidence, the country was ‘otherwise engaged’ in August and the sales figures show a mixed picture.”

However, she pointed out it could have been “much worse”, claiming that August was traditionally a weak month for sales.

“The challenge remains to accurately forecast outcomes in such a volatile trading environment.”

Sarah Peters, Head Retail Analyst, Verdict Research, however, told ChannelBiz she wasn’t surprised at the findings.

“We’re still waiting for our figures but it doesn’t surprise me the results from the BRC are weak. We never expected the Olympics to generate sales.

“Historically there hasn’t been any uplift in sales with the Olympics. Yes footfall is higher, but like in London, many people also stayed away from the capital as a result of transport issues and crowds.

“It’s also important to remember that generally London is busy anyway in August.

“Also people were more inclined to stay at home and watch the actual event.

“The BRC’s findings that Grocery sales went up is also not a surprise with people staying at home, making BBQs and those on their way to an event grabbing a snack.”

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