UK retail sales down 0.3% in July
UK retail sales fell by 0.3% on a like-for-like basis year-on-year in July according to figures released by the British Retail Consortium and KPMG.
On total basis sales rose by 1.3%. The three-month average total sales growth of 1.3% was below the 12-month average of 2.3%.
While furniture was the best performing category and achieved its highest growth since January excluding Easter distortions, food experienced its deepest three-month average decline since the BRC began its records in 2008.
Over the last three months, food showed a decline of 1.4% in contrast with the 0.4% growth seen over the last twelve months. The BRC said the fall was largely due to continuing price competition between supermarkets and to record low food inflation.
Never Miss a Retail Update!Non-food reported growth of 3.4% over the three months to July 2014, in line with its twelve-month average of 3.8%. The home categories improved after a weaker performance in June.
Online sales of non-food products in the UK grew by 14.9% in July compared to a year earlier. The non-food online penetration rate was 16.7% in July, 1.4% higher than in July 2013. Growth was driven by furniture, kitchen appliances, gaming and toys.
BRC director general Helen Dickinson said: “This July we have achieved overall growth of 1.3% year-on-year, which at first glance compares unfavourably with the 2.3% long-term rate over the last twelve months. However, July last year was a tough month to beat because consumers had really responded well to high profile exciting sporting events and of course, the birth of the royal baby.
“The home categories showed a pick up this month after performing less well in June; furniture reported its highest growth since January excluding Easter distortions and home accessories and house textiles (especially lightweight bedding) all did well. Understandably, outdoor products sold well as did overall toys and baby equipment.”
David McCorquodale, head of retail at KPMG, added: “The tale of two sectors continues with polarisation between food and non-food.
“Fashion retailers are enjoying a better summer, even against tough comparatives that included a heatwave, royal baby and a British Wimbledon champion, and many have avoided the price cutting sprees seen last year. There was even a bounce back in furniture and household spend following a softening in June.
“The headache for the grocer investor is the tonic for the consumer: it’s likely these price wars are here to stay for the foreseeable future.”
