June retail sales fail to shine

UK retail sales suffered the ‘worst June on record’ according to the latest British Retail Consortium (BRC)-KPMG monthly sales monitor.

Covering the five weeks from May 26 to June 29, total sales decreased by 1.3% in June, against an increase of 2.3% in June 2018. This decline drags the 3-month average into a decline of 0.1% and the 12-month average to an increase of 0.6%: the lowest since the monitor began in December 1995.

June retail sales decreased by 1.6% on a like-for-like basis from June 2018, when they had increased 1.1% from the preceding year. This is lower than the 3-month and 12-month averages of -0.4% and -0.1% respectively – and represents the worst 12-month average since April 2012.

Over the three-months to June, non-food retail sales decreased by 2% on a like-for-like basis and 2.1% on a total basis. This is below the 12-month total average decrease of 0.8%, and is the worst quarterly decline since February 2009.

However, online sales of non-food products grew 4% in June, against a growth of 8.5% in June 2018. The 3-month and 12-month average growths were 3.3% and 5% respectively.

BRC chief executive Helen Dickinson OBE said: “June sales could not compete with last year’s scorching weather and World Cup, leading to the worst June on record. Sales of TVs, garden furniture and BBQs were all down, with fewer impulse purchases being made. Overall, the picture is bleak: rising real wages have failed to translate into higher spending as ongoing Brexit uncertainty led consumers to put off non-essential purchases.

“Businesses and the public desperately need clarity on Britain’s future relationship with the EU. The continued risk of a No Deal Brexit is harming consumer confidence and forcing retailers to spend hundreds of millions of pounds putting in place mitigations. This represents time and resources that would be better spent improving customer experience and prices. It is vital that the next Prime Minister can find a solution that avoids a No Deal Brexit on October 31, just before the busy Black Friday and Christmas periods.”

KPMG head of retail Paul Martin added: “There are few places retailers can hide from the difficult trading conditions that have been hitting the industry for some time. June’s retail performance did little to ease that, with like-for-like sales falling 1.6% compared with last year.

“On the high street, consumers were eager to pull up a pew for the summer’s sporting events, with added interest in the furniture category. Otherwise, consumers largely turned a blind eye to offers in the physical retail space.

“With 4% online growth, shoppers were thankfully more engaged in this channel, making the most of the added convenience and continued aggressive pricing. Fashion performed particularly well thanks to end-of-season sales and upcoming holidays.

“Pressure on retailers continues to mount and is seemingly coming from all angles: economic, geo-political, environmental and behavioural. Consumer spend is only likely to fall further as things stand, and cost efficiency remains vital. The focus for most in the industry will be preservation and adaptation in order to see them through these tough times.”