Published on August 7th, 2018 | by The GC Team0
July retail sales disappoint
For all the hopes placed on the World Cup and the sunshine in July, retail sales fell short of expectations, growing only 0.5% on a like-for-like basis.
The scorching 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,” according to the British Retail Consortium.
Nonetheless, in-store sales of non-food items declined 2.4% on a like-for-like basis, and while online sales of non-food products grew 7.5%, this compared to 8.3% growth in July 2017.
Helen Dickinson OBE, Chief Executive of the British Retail Consortium, said 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.”
Although the weather generates a shift in month-to-month spending, trend growth remains very low by historical standards, according to Dickinson.
“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.”
Paul Martin, UK Head of Retail at KPMG, said: “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.”