UK retail sales values were up 2.2% last month on a like-for-like basis from July 2012, when they had increased 0.1% on the preceding year, according to BRC/KPMG. On a total basis, sales were up 3.9%, against a 2% increase in July 2012 – the fastest July growth since 2006. In real terms, total growth was 4.4%, the fastest since April 2011.
However, while the sunny weather boosted the food and fashion categories, the home categories were dampened – Furniture & Flooring, Home Accessories and House Textiles – suffered some of their worst performances in the year. Furniture and Flooring recorded its worst decline since last August, Christmas excluded.
Online sales were up 7.9% compared with July 2012, when they had risen by 15.6%. These sales were up against strong comparatives, as July 2012 had seen the strongest growth recorded in 2012 after Christmas. In addition, last month’s hot weather did not encourage shoppers to stay indoors or browse on their computers. As a result, online growth was only 7.9%, the second slowest rate this year after March. However, the trends experienced online were fairly similar to those on the high street, with fashion categories benefitting from a summer appeal while home and indoor items felt neglected.
Helen Dickinson, director-general, British Retail Consortium, says: “This is a very solid sales performance, the second best month this year and better than we’ve seen in any July since 2006. It has been driven by the warm weather and retailers working hard to offer deep discounts and great offers to their customers, with the reduction in shop prices we reported for July translating into more generous spending in UK stores."
David McCorquodale, head of retail, KPMG, adds: “July was a golden month for retail sales and marks a return to form for British retailers. Hopefully this uptick in sales is another indication that the UK economy has turned the corner towards growth. Murray mania, summer sun and the arrival of the royal baby gave consumers that much-needed feelgood factor, encouraging them to leave caution behind and help retailers put in a champion performance.
“Whilst this month’s figures will be a relief after last year’s washout summer saw shoppers stay at home, some of these sales were heavily driven by discounting. Whether retailers have sacrificed too much margin to drive these sales remains to be seen."
