Insight: UK retail sales growth slows in July heat
UK like-for-like retail sales edged up 0.5% year-on-year in July as food sales had their best July in five years and non-food sales struggled.
Figures from the British Retail Consortium and KPMG reveal that total sales increased by 1.6% against a rise of 1.4% in July last year. This was below the three-month average of 2.7%, but in line with the 12-month average of 1.6%.
Over the three months to July, food sales rose by 3.1% on a like-for-like basis and by 4.5% on a total basis. The BRC said the category’s monthly performance was the highest since July 2013, excluding Easter distortions.
During the same three-month period, non-food retail sales edged up 0.2% on a like-for-like basis and by 1.2% on a total basis. However, after two months of growth, July sales in the category were back in decline.
Helen Dickinson, BRC chief executive, said: “Last month’s sweltering temperatures kept shoppers focused on eating, drinking and keeping cool. Food sales had their best July in five years, while fans and cooling equipment flew off the shelves.
“However, total sales growth slowed as the heat laid bare the underlying weakness in consumer spending. Sales of non-food products struggled – three months into an extended period of summer weather, demand for many seasonal purchases has slowed while the heat has kept shoppers away from days spent browsing new ranges.”
Meanwhile, online sales of non-food products grew by 7.5% in July against growth of 8.3% in the same month last year. In-store sales of non-food items declined by 1% on a total basis and by 2.4% on a like-for-like basis.
Dickinson added: “Physical stores have been particularly affected by pressures on consumers while costs borne by retailers have continued to rise. Over the last year, in-store sales of non-food products fell 2.5%, at the same time as business rates bills increased nearly 3%. Although changing consumer behaviour means we will have fewer shops in future, the reality is that if we want to support a positive reinvention of our high streets, business rates cannot go on increasing.”
