‘Rosier’ outlook as warm weather boosts sales and footfall
The warmest month of the year boosted sales and footfall, according to new figures.
UK retail sales in June increased by 1.2 per cent on a like-for-like basis from June 2016, when they decreased 0.5 per cent from the preceding year, the BRC-KPMG Retail Sales Monitor revealed.
On a total basis, sales rose by two per cent, compared with a growth of 0.2 per cent in June 2016.
In the three months to June, non-food retail sales in the UK increased by 0.9 per cent on a like-for-like basis and 1.2 per cent on a total basis – the best three-month average since December 2016.
Online sales of non-food products grew by 10.1 per cent in June, compared to nine per cent in the same month last year.
The BRC-Springboard Footfall and Vacancies Monitor also showed that our mini-heatwave got people out shopping, with a rise in footfall in June, up 0.8 per cent compared with a year ago. It also increased by 0.5 per cent on a three-month basis.
Footfall in retail parks grew by 2.3 per cent, compared with a one per cent decrease in the same month a year ago.
However, high-street footfall saw a decrease of 0.9 per cent in June, although this was still an improvement on the 3.7 per cent drop in June 2016.
Shopping centres also saw a fall of 0.8 per cent, but again up from the 2.3 per cent drop recorded in June 2016.
British Retail Consortium chief executive Helen Dickinson said: “The arrival of summer provided a welcome pick-up to sales growth in June, particularly to non- food categories which saw a reversal in fortunes after a prolonged period of sluggish growth.
“The six-month average, buoyed by June’s strong performance, now paints a slightly rosier picture for retail sales. But on closer inspection the year-on-year numbers belie the fact that rising food prices are responsible for the main component of growth and have prompted more cautious spending towards discretionary non-food items.
“Online continues to take the lion’s share of growth, although contribution from stores increased slightly in June as it seems shoppers headed out with specific purchases in mind, rather than just to browse.
“Looking ahead, there’s a question mark over whether this spending momentum will last, as household expenditure is increasingly squeezed from rising inflation and slowing wage growth. The reality is that retailers’ efforts in absorbing mounting cost pressures into their margins are already being tested, so the Government must have the consumer front of mind as it enters the UK’s trading negotiations with the EU, to avoid any further cost increases to retailers and their customers.”
On the rise in footfall Ms Dickinson added: “The arrival of summer spurred greater shopper footfall in the majority of retail destinations in June with high streets and retail parks seeing solid growth in footfall.
“Amidst economic uncertainty and mounting concern over the inflationary squeeze on household incomes, sustaining growth in shopper footfall will be challenging, more so as retailers seek to convert that into an improved performance at tills. And while they step up their efforts to keep prices down for their customers against rising input prices and inflation, the Government can help alleviate the cost pressures in the immediate term by sticking to their commitment on business rates reform to deliver a system fit for purpose in the 21st century.”