Homeware sales move to top of performance rankings in July

Retail sales growth slowed in July from June, according to the British Retail Consortium (BRC) and KPMG.

The BRC-KPMG monthly retail sales monitor the four weeks from July 2 to July 29, reveals that sales edged up by 0.9% on a like-for-like basis from June 2016, compared with 1.1% from the preceding year.

Over the three months to July, food sales rose by 2.3% on a like-for-like basis and 3.4% on a total basis, while non-food retail sales dropped by 0.7% on a like-for-like basis and by 0.4% on a total basis.

BRC chief executive Helen Dickinson OBE said July’s growth was “underpinned by food sales alone”, while non- food sales “relapsed into negative territory as the competition heats up over a shrinking pool of discretionary consumer spending power.”

But she added: “Despite the gloomy picture for non-food overall, there were some success stories. The homeware category for instance – which lost out in June to summer wardrobe purchases – moved to the top of the performance rankings.”

Helen concluded: “Against a backdrop of increased consumer borrowing and shrinking real wages, we can expect food to continue making the running for sales growth for the time being, although driven more by price than volume, with non-food continuing to struggle.”

KPMG UK Head of Retail Paul Martin commented: “Bucking the overall trend in non-food, children’s footwear seems to have been a popular purchase, no doubt encouraged by the start of summer holidays. Elsewhere, the rainy month turned attention indoors, with furniture and home accessory sales benefiting.”

He noted: “Interestingly, July retail sales diverge from the latest consumer confidence figures, which noted a downturn in consumer sentiment. This divide suggests that UK shopping patterns remain mixed, although with demand continuing to be weak, retailers would be wise to remain cautious.”

He is referring to the news announced by technology and payments business Visa that consumer spend fell for the third month in a row in July. The drop represents the first time overall spending has declined for three consecutive months, since February 2013 (see separate story).

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