Last month retail sales were down 0.3% on a like-for-like basis from July 2013, when they had increased 2.2% on the preceding year. But on a total basis, sales were up 1.3% year-on-year, according to the latest monthly retail sales monitor from the British Retail Consortium (BRC)-KPMG.
Furniture was the best performing category, reporting its highest growth since January, excluding Easter distortions. Food was the worst performing category and experienced its deepest three-month average decline since BRC records began in December 2008.
BRC director general Helen Dickinson said: “This July we’ve achieved overall growth of 1.3% year-on-year, which at first glance compares unfavourably with the 2.3% long-term rate over the last 12 months. However, July last year was a tough month to beat because consumers had really responded well to high profile sporting events and of course, the birth of the royal baby.” She attributed the decline in food sales partly to keen price competition between supermarkets and record low food inflation.
She also noted that the home categories showed a pick up in July after performing less well in June, with furniture leading the way. It was the fastest-growing category and enjoyed its highest growth since January, barring Easter distortions. Furniture was also the greatest contributor to total sales growth, with good demand for big-ticket clearance items. Home accessories experienced its highest growth since February, and household textiles showed a significant pick-up from the previous month and continued to be driven by good demand for lightweight bedding. Small appliances were also a strong driver of growth.
KPMG head of retail David McCorquodale said: “The tale of two sectors continues with polarisation between food and non-food. While non-food retailers had a stellar month – there was even a bounce back in furniture and household spend following a softening in June – the grocers’ figures continue to make for gloomy reading for the sector. The impact of their prolonged discounting campaigns may be good news for consumers, but must be being felt deeply by the retailers, given that like-for-like sales have fallen in value every month for the last 12 months (save for April when Easter helped sales). The headache for the grocer investor is the tonic for the consumer; it’s likely these price wars are here to stay for the foreseeable future.”