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BRC-KPMG: Retail sales growth declines further in July

Sale sign - shutterstock 291593120 725 x 500

July's BRC-KPMG Retail Sales Monitor show a slowdown in consumer spending, despite increased demand for food which experienced its best July sales in five years. 

The monthly monitor showed a 0.5% year-on-year rise in like-for-like sales for July (2017: 0.9%). The same figure for June was 1.1%; the month benefiting from warm weather and the World Cup which boosted sales of alcohol, barbecue and televisions.

Paul Martin, UK Head of Retail at KPMG said: "For all the hopes placed on the World Cup and the glorious weather, it seems retail sales still fell short of expectations, growing only 0.5 per cent on a like-for-like basis in July 2018. It was perhaps just too hot to hit the high street.

"Unsurprisingly, food and drink fuelled the majority of sales growth thanks to summer BBQs, picnics and football festivities, whilst elsewhere growth was mainly witnessed among the holiday essential categories, including health & beauty, deck chairs and fashion. This was particularly true when comparing the high street to online, with the latter faring considerably better.

"July's performance reinforces the fact that it will take more than events-based retail and sunshine to improve the health of the high-street.

"Retailers must improve efficiency, in many cases reinvent themselves and adapt to the changing retail environment, including last week's interest rate rise."

BRC CEO, Helen Dickinson, 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.

“For many in the industry, autumn could not come sooner.”

“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 per cent, at the same time as business rates bills increased nearly 3 per cent.

“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.”

Source : Insight DIY Team and BRC-KPMG

Image : Shutterstock 291593120

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07 August 2018

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