Retail sales rise but growth slows

Sales increased by 6.4 per cent last month, compared to 3.2 per cent in July 2020.

But sales were below the three-month average growth of 14.7 per cent and the 12-month average growth of 10.4 per cent, according to figures published by the British Retail Consortium (BRC.)

The latest BRC-KPMG retail sales monitor also found that in comparison to pre-pandemic levels, total retail sales were up 9.1 per cent.

Across the three months to July, in-store sales of non-food items jumped by 64.9 per cent, much higher than the 12-month average growth of 20 per cent.
But compared to 2019, stores saw a decline of 3.6 per cent across the 12-weeks.

Helen Dickinson, chief executive of the BRC, warned that the lifting of restrictions had not brought the in-store boost that had been anticipated, largely due to wet weather.

During the same period this year, food sales increased 2.9 per cent on a total basis and by 0.8 per cent on a like-for-like basis. This is below the 12-month total average growth of 5.6 per cent.

Non-food retail sales increased 24.6 per cent on a total basis by and 17.6 per cent on a like-for-like basis. This is above the 12-month Total average decline of 14.4 per cent.

For the month of July, non-food was in growth year-on-year. On a two-year basis, sales of this kind saw growth of 12.5 per cent for the three-months to July.

Online non-food sales increased by 0.6 per cent in July, against a growth of 41 per cent in July 2020. This is above the three-month average decline of 4.6 per cent, but below the 12-month average growth of 36.4 per cent.

Dickinson said that online sales had remained strong, with weddings and other social events boosting formalwear and beauty, and fashion outlets bouncing back to pre-pandemic levels.

“As many people prepare to return to the workplace, purchase of home office equipment began to fall after months of high sales, meanwhile other homeware, such as furniture and household appliances continued to do well,” she explained. “However, the vacancy rate is continuing to rise.”

The chief exec added that many shops and local communities had been “battered” by the pandemic, with many High Streets in needed of further investment.

“Whilst the High Street saw continued growth in July, with sales up 6 per cent, unsurprisingly online sales fell back - although less than expected - by -0.4 per cent compared to July 2020,” said Paul Martin, UK head of retail at KPMG. “Both women’s and men’s clothing continued their revival with strong growth in-store and online.”

Martin added: “Many other non-food categories had a less strong performance, especially those related with the home after the house moving frenzy of recent months started to abate. With better weather and school holidays underway, consumers are happy to shop for clothes, shoes and accessories for those much needed social events.”

He warned that over the next few months the sector is expected at a much slower rate as retailers face a number of challenges, including staffing pressures, increases in commodity and component costs, rising inflation eating into households’ spending power, and “stalling consumer confidence.”

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