Marks & Spencer Share News (MKS)

(ShareCast News) - British retail sales in April fell on a like-for-like basis compared to last year, with non-food sales outweighing positive food sales.The monthly Retail Sales Monitor (RSM) from the British Retail Consortium (BRC) and KPMG showed total sales were flat for a second month in a row, but the LFL retail sales for April fell 0.9% on the same month last year, well short of the consensus +0.5%.Unlike the official retail measure, the BRC is not calendar adjusted, and so likely was depressed by the shift in the timing of Easter.Backing up the woes reported by clothes retailers recently, the 12-month average growth for non-food sales slowed to 2.5%, while for food sales it nudged back into positive territory at 0.1%.Moreover, the three-month average of annual growth in total food sales picked up to -0.2%, from -0.7% in March.Economists pointed out that, on the same basis, growth in non-food sales values eased to a 37-month low of 0.7%, from 3.0% in March, with the three-month average only positive due to a strong performance in February.Pockets of strength in non-food were seen furniture and homewares, while the worst sub-sector was footwear, followed by outdoor sports and leisure sales and gardening, beating even clothing, as all were badly depressed by the impact of the cold weather as April temperatures were 0.9 degrees below the long-term average."Overall, flat total sales mask a very mixed picture; some retailers benefitting from the healthy housing market, while others are evidently more susceptible to the effects of lower consumer confidence and a higher proportion of disposable income going into leisure and entertainment," said Helen Dickinson, BRC chief executive."While glimmers of hope are evident, the rapid pace of change in the industry, increasing cost pressures and other businesses burdens remain a cause for concern."Broker Peel Hunt said this data along with other prints "reinforce the view that UK consumer confidence is waning".Independent retail analyst Nick Bubb said the data was "a bit of a relief" as expectations ahead of the release were pretty low given the very weak trading experienced by fashion retailers last month.Sam Tombs at Pantheon Macroeconomics agreed the negative headline LFL figure was no surprise, following very weak surveys from the CBI and BDO and a series of poor trading updates from retailers, but he said May's hotter weather should ensure postponed purchases are now undertaken."Nonetheless, the slowdown in employment growth and the intensification of the fiscal squeeze in April suggest that a fundamental slowdown in consumer spending growth is under way and that any bounce back in sales in May will be relatively modest."Clive Black at Shore Capital said the clement start to May should help both non-food and food.But he noted: "Slowing UK GDP, noting recent downgrades to expectations, is also not a good sign for ongoing household spending growth, it should be said, all of which makes for few upgrades across the industry and so the greater chance of rating contraction for sector equities than advance."Even that bastion of visibility and control Next has stumbled in recent times, leading us to remain most interested in pure-play non-food online as investment targets and selective recovery plays in the sector to our minds."