High Street sales see small rise in July
Retail sales across the UK saw a slight improvement in July but trading conditions remain difficult according to the British Retail Consortium.
The BRC-KPMG Retail Sales Monitor found that retail sales values were 0.6% higher on a like-for-like basis from July 2010, when sales had risen 0.5%.
On a total basis, sales were up 2.5%, against a 2.6% increase in July 2010 but the BRC said consumers were actually buying fewer goods once the impact of January’s increase in VAT from 17.5% to 20% was taken into account.
Food sales growth picked up in July after a poor June. Clothing and footwear picked up after a tough June, helped by clearance sales. Homewares were mostly down on a year ago and often promotion-led. Consumer caution continued to hit big-ticket housing-related purchases.
Non-food non-store (internet, mail-order and phone) sales growth slowed after June’s clearance-led uplift. Sales were 9.6% higher than a year ago, compared with 11.5% in June and 11.3% in July 2010.
Stephen Robertson, director general, British Retail Consortium, said:
“This is a modest improvement on recent months but overall conditions remain very difficult for retailers.
“Food sales continue to outperform non-food with inflation helping to drive top-line growth. But shoppers were only tempted into stores by an unprecedented number of promotions which come at the expense of margins. Sales of non-food goods barely grew, though clearance events helped summer clothing in particular.
“Growing fears of a global economic slowdown and a sovereign debt crisis have sent shockwaves through financial markets. Policymakers in Europe and the US must act quickly to implement a coordinated and credible strategy to reduce public sector deficits while supporting growth. Business and consumer confidence needs to be restored quickly before spending paralysis sets in.”
Helen Dickinson, head of retail, KPMG, said: “July was a better month than June, seeing an improving trend for the food sector and an uplift for clothing when the good weather finally kicked in. However, retailers of big-ticket items continue to find the market conditions challenging, with customers still reluctant to make major spending commitments.
“Apart from March, when sales were reduced by this year’s later Easter, this is the weakest growth for non-store sales of non-food goods for almost two years. The long-term progress of online retailing means internet shopper numbers and how much they’re buying continue to increase but the squeeze on household budgets is causing that to slow as people cut back where they can.”
