Retail sales ‘lacklustre’ in July
Retail sales rose slightly in July but did not receive any significant boost from the start of the Olympic Games according to figures released by the British Retail Consortium and KPMG.
Like-for-like retail sales edged up 0.1% year-on-year in July while total sales values rose 2% as warm weather in the final week and the start of the Olympic Games helped to support sales. However, a sharp fall in food inflation dampened top line growth.
The BRC said the three-month rolling average showed the growth of like-for-like non-food sales outpacing food sales for the first time since May 2010, driven by strong growth in clothing, footwear, toiletries and cosmetics. Discretionary and big-ticket items continued to struggle with sales growth promotion-driven.
Online sales of non-food items rose 15.6%, the strongest growth of the year.
Never Miss a Retail Update!Stephen Robertson, director general, British Retail Consortium, said: “July was clearly not a golden month for retail. Like-for-like sales were virtually flat compared with a year ago and total growth of 2% was still behind inflation as consumers, dealing with squeezed budgets, prioritised their spending on essentials.
“With only the opening couple of days of the Olympic Games covered by these statistics we’ll have to wait a while to assess the overall impact on retail sales. Let’s hope Team GB keeps on increasing its medal tally, bringing a feelgood factor that helps consumer confidence.”
Helen Dickinson, head of retail, KPMG, added: “Sadly July was a lacklustre month and it’s doubtful this trend will change as early expectations that the Olympics will raise retailers’ fortunes look to be wide of the mark. Central London’s retailers are already being hit hard by shoppers actively avoiding the capital. It’s likely that any blip of benefit the games bring will be short lived.
“Sales of women’s and children’s footwear were the only highlight as families grappled with the ongoing effects of unseasonal weather. The lack of any feelgood factor encouraging consumers out into the shops has provided a set of figures much more indicative of the true underlying trend. These show weakness in sentiment as disposable incomes remain squeezed, despite the fall in headline inflation. It’s a real challenge for retailers to grow sales and many are only achieving this at the expense of margins.”
