Retail sales returned to growth in July after the long-awaited summer boost for retail finally arrived along with the warmer weather.
Total retail sales increased by 0.5 per cent year on year in July, up from the three-month average growth rate of 0.3 per cent, according to the British Retail Consortium (BRC)-KPMG Retail Sales Monitor
Retail sales fell 1.5 per cent month on month in June.
Sales of clothing, health and beauty products did particularly well during the month as shoppers “prepared for days out with friends and holidays away”, chief executive of the BRC Helen Dickinson OBE said.
Food sales, too, increased by 2.6 per cent year on year over the three months to July – aided by warmer weather and the euros – albeit below the 12-month average growth of 5.3 per cent.
Non-food sales down
Non-food sales decreased 1.7 per cent overall year on year over the three-months to July, against a decline of 0.5 per cent last July.
“As consumers spent on holidays and entertainment, sales of indoor goods, such as furniture and household appliances, were squeezed out,” Dickinson added.
In-store non-food sales were the worst-performing area, falling by 2.7 per cent year on year. The proportion of non-food items bought online rather than in-store increased to 35.5 per cent in July, from 34.9 per cent in last year.
Linda Ellett, UK Head of Consumer, Retail & Leisure at KPMG, said: “While summer staples… helped to drive retail sales growth both online and in-store in July, the upturn is likely much less than retailers were hoping for at this key time of the year.
A busy summer of televised sport has played a beneficial role in increasing TV, mobile and tablet sales over the last two months, but there’s little evidence of other big ticket purchases taking place.
The rest of the year should see retail balance after an up-and-down year of sales, with “a gradual drip effect from those choosing to spend some,” Ellett said, “rather than the spending taps suddenly being turned on full”.
“Now that election uncertainty is over and [the] Government is rolling out plans to kickstart economic growth, retailers are planning their own investment strategies,” Dickinson added.
Many will be looking to the Autumn Budget, keen to see an end to business rates rises under the new Labour government… They will also be looking for any details of the reform of the whole business rates system, promised in Labour’s manifesto,” she said.
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