BRC-KPMG: UK retail sales slow in June

UK retail sales grew in June, albeit with total growth slowing to 0.2%, according to the monthly retail sales monitor from the British Retail Consortium (BRC)-KPMG.

BRC chief executive Helen Dickinson said: “While sales did slow towards the end of the month, it is too early to define this as a trend.”

She notes that the month was predominantly driven by a decline in sales in the fashion categories “which isn’t a surprise, given that June 2015 saw record growth in clothing and footwear.

“Looking across the last three months, food has held its ground with a better performance than non-food sales, which has seen its lowest growth since April 2012, largely due to fashion combined with a slowdown in furniture.” 

Helen added that the EU referendum vote has not changed retailers’ “relentless pursuit of delivering for customers day in, day out or their investment in meeting the needs of fundamental changes in the way people shop, driven by digital and technology.

“Despite the fall in the pound, the time it takes for any input price increases to translate into higher shop prices will depend on a combination of factors including further changes in the pound, commodity prices and the challenge for retailers to move pricing given the intensity of competition. So, there won’t be any instant shocks as any changes would take time to feed through.” 

KPMG head of retail David McCorquodale commented: “Overall retail figures decelerated in June, with sales down 0.5% on a like-for-like basis.

“As consumer attention shifted indoors to escape autumnal downpours, furniture and home accessories bounced back in the month, with bigger ticket items proving relatively resilient in the days immediately following the EU referendum. 

“With May sunshine a distant memory, however, summer wardrobes remained bare as sales of women’s fashion and footwear plummeted following one of the wettest and dullest starts to a UK summer since records began. 

“Elsewhere, Euro 2016 kicked things into gear a bit for the grocers, with sales improving 0.8% in the three months April-June. However, the decline on a like-for-like basis suggests food and drink sales continue to be dragged down by the deflationary tide in the sector. 

“While the ramifications from the Brexit vote may well affect consumer confidence, retailers will be hoping the long-promised heatwave and potential stay at home holidays will be enough to drive shoppers back to the high-streets over the months ahead.” 

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