Consumer spending “languishing” warns BRC

Total sales increased by 0.3 per cent in July, which is the lowest figure recorded for the month of July since records began in 1995, and comes after the worst June on record.

The latest BRC–KPMG Retail Sales Monitor, covering the four weeks 30 June – 27 July 2019, also shows that in the same period last year numbers were up by 1.6 per cent in comparison.

In addition, UK retail sales increased by 0.1 per cent on a like-for-like basis from July 2018, when they had increased 0.5 per cent from the preceding year. This is above the three-month average of -1.5 per cent.

Over the three months to July, in-store sales of non-food items declined 4.1 per cent on a total basis and four per cent on a like-for-like basis.

However, non-food products sold well online in July, with sales up 3.7 per cent, against a staggering growth of 7.5 per cent in July 2018 in comparison.

Household appliances was the second-best performing retail category in July this year in terms of total sales, while online sales growth puts it in fourth place.

Helen Dickinson OBE, Chief Executive, British Retail Consortium, commented: “While retailers will welcome the return to growth, it has nonetheless been a punishing few months for the industry. The combination of slow real wage growth and Brexit uncertainty has left consumer spending languishing with the 12-month average total sales falling to a new low of just 0.5 per cent.

“Whereas last year’s glorious sunshine and World Cup Finals led to strong consumer demand over the summer, this year has been weak in comparison, with both June and July showing the lowest sales on record for their respective months. And it is not just high streets that are suffering, with non-food online growth also one percentage point below the 12-month average.”

Paul Martin, UK Head of Retail at KPMG, added: “The UK may have had record temperatures in July, but retail sales were far from record-breaking at just 0.3 per cent growth. While any growth is welcome after two months of decline, it’s clear that most players need more than sunshine to get back on their feet.

“With consumer confidence holding up in the face of prolonged Brexit uncertainly, shoppers are notably disengaged overall. The pressure continues to build between online and physical offerings, costs continues to rise and the demands of consumers continue to grow. The key question is, who can handle the heat?”