Some retailers “hanging by a thread” as BRC reports of July sales growth

Retail sales rose again in July, but the number of high street visits is still significantly down, according to the British Retail Consortium (BRC).

Retail sales rose for the second consecutive month in July, up 3.2 per cent compared with the same month last year, but there were mixed results for retailers as the three months to July this year saw in-store sales of non-food items decline by a total of 29.3 per cent. The BRC said some retailers continue to struggle due to the COVID-19 crisis.

Figures instead showed that consumers were mostly shopping online during July, accounting for 41 per cent of sales compared to last year.

Footfall numbers were down in this recent period as many people are still reluctant to go out, and fewer impulse purchases are being made, said Helen Dickinson, Chief Executive of the BRC.

“While the rise in retail sales is a step in the right direction, the industry is still trying to catch up lost ground, with most shops having suffered months of closures,” she said. “The fragile economic situation continues to bear down on consumer confidence, with some retailers hanging by only a thread in the face of rising costs and lower sales.”

Paul Martin, UK Head of Retail at KPMG, which partners with the BRC on these Retail Sales Monitors, added that while social distancing restrictions have eased and daily lives are starting to return to a degree of normality, shoppers are still focussed on life at home for the most part.

“Online sales continue to remain prominent,” he said, “accounting for over 40 per cent of sales. But September will be the real test for retailers this quarter, traditionally being a month of high volumes after the holiday season.

“That said, with the furlough scheme unwinding and wider economic uncertainty set for the autumn, consumer anxiety will likely rise along with it. This will place more scrutiny on disposable income and make life even tougher for retailers.”

Ms Dickinson went on to say that shop rents are also continuing to accumulate and that the next Quarter Rent Day could see some businesses fall into insolvency.

The BRC has repeated a call for a Government grant to help pay rents, saying retailers were “struggling”.

“The Government should adopt the proposal from landlords and tenants for a Property Bounceback Grant,” continued Ms Dickinson, “which would deliver £7 billion in tax revenue to the Exchequer and save 375,000 jobs.”