UK retail sales values were up 0.1% on a like-for-like basis from July 2011, when they were up 0.6% on a year ago, according to the latest figures from the British Retail Consortium (BRC) and KPMG.
On a total basis, sales were up 2.0%, against a 2.5% rise in July 2011.
Warm weather in the final week of the month, combined with the start of the Olympics, helped support food and drink sales. Food sales were virtually flat on year-earlier levels, the decline over recent months driven by falling food inflation and continued consumer austerity.
The underlying trend for sales growth has been on a downward trajectory since the start of the year. The cooler weather during much of the month drove the sale of comfort food such as soups, stews and pies. But warmer weather at the end of the month helped the sale of salads, fruits and barbecue foods.
Overall food sales were boosted in the final week of the month as consumers prepared for Olympic parties while extended Sunday trading also helped some outlets. Premium lines did well where people traded down from dining out and meal deals remained popular.
The three-month rolling average showed the growth of like-for-like non-food sales outpacing food sales for the first time since May 2010, driven by strong growth in clothing and footwear and toiletries and cosmetics.
Stephen Robertson, BRC director general, said: “July was clearly not a golden month for retail. Like-for-like sales were virtually flat compared with a year ago and total growth of 2% was still behind inflation as consumers, dealing with squeezed budgets, prioritised their spending on essentials.
“After the June wash-out, more wet weather in July continued to stifle demand for outdoor gear. There was a boost for food retailers towards the end of the month as the sunshine came out and shoppers started getting in party food and drink ahead of the Olympics but it wasn’t a significant help.
“The brightest spot was clothing and footwear thanks to cooler weather coinciding with autumn ranges reaching the shops. Consumers responded enthusiastically to the chance to refresh their wardrobes with items they could make use of straightaway. Some retailers also benefitted from the longer Sunday opening hours brought in for the Olympic period.
“With only the opening couple of days of the Olympic Games covered by these statistics we’ll have to wait a while to assess the overall impact on retail sales. Let’s hope Team GB keeps on increasing its medal tally, bringing a feelgood factor that helps consumer confidence.”
Joanne Denney-Finch, food and drink chief executive at IGD, said: “The see-saw summer continued in July, with persistent rain in the first half of the month and sunshine emerging in the last two weeks. The warmer weather, extended Sunday opening and the run-up to the Olympics, helped boost food and grocery sales – which peaked in the final week.
“With the nation now captivated by the Olympics, British food could benefit from the patriotic spirit. Nearly half of shoppers (45%) tell us supporting British or local producers is an important factor when choosing what food they buy.”
Source: BRC
