Retail sales in UK up 2.3% YoY in July 2022: BRC-KPMG

Retail sales increased 1.6 per cent on a like-for-like basis from July 2021, when they had increased 4.7 per cent. This was above the 3-month average decline of 0.5 per cent and below the 12-month average growth of 0.8 per cent.

Over the three-months to July, non-food retail sales decreased by 2 per cent on a total basis and 2.5 per cent on a like-for-like basis. This is below the 12-month total average growth of 4.5 per cent. For the month of July, non-food was in growth year-on-year, as per the sales monitor.

Over the three months to July, in-store sales of non-food items increased 2 per cent on a total basis and 1.2 per cent on a like-for-like basis since July 2021. This is below the 12-month growth of 34.4 per cent.

Online non-food sales decreased by 3.9 per cent in July, against a decline of 0.6 per cent in July 2021. This is above the 3-month average decline of 7.3 per cent and the 12-month decline of 14.1 per cent. The non-food online penetration rate decreased to 39.5 per cent in July from 42.3 per cent at the same point last year.

Helen Dickinson OBE, chief executive, British Retail Consortium (BRC), said: “Sales improved in July as the heatwave boosted sales of hot weather essentials. Summer clothing, picnic treats, and electric fans all benefitted from the record temperatures as consumers made the most of the sunshine. However, with inflation at over 9 per cent many retailers are still contending with falling sales volumes during what remains an incredibly difficult trading period.

“Consumer confidence remains weak, and the rise in interest rates coupled with talk of recession will do little to improve the situation. The Bank of England now expects inflation to reach over 13 per cent in October when energy bills rise again, further tightening the screws on struggling households. This means that both consumers and retailers are in for a rocky road throughout the rest of 2022.”

Paul Martin, UK head of retail at KPMG, said: “The sun came out for retailers in July, as like for like sales grew 1.6 per cent on last year. Against a backdrop of the cost-of-living crisis and on-going reports of low consumer confidence actual sales are still holding up. Online retailers also saw the benefit of warmer weather with sales growth falling more slowly, by just 3.9 per cent on July 2021.

“Despite consumer polls suggesting confidence is at an all-time low, this hasn’t translated to money not being spent at the tills, as consumers are determined to enjoy delayed holidays and an unrestricted summer. Pent up demand, especially for new clothes, has so far been at significant enough levels to keep the overall retail sector in relatively good health.  With travel and summer socialising back on the agenda, retailers will be hoping the feel-good factor continues into August.

“However, the summer could be the lull before the storm with conditions set to get tougher as consumers arrive back from summer breaks to holiday credit card bills, another energy price hike and rising interest rates. With stronger cost of living headwinds on the horizon, consumers will have to prioritise essentials, and discretionary product spending will come under pressure. As margins continue to be challenged, and costs continuing to rise, a significant drop in demand come the Autumn will have detrimental impact on the health of the retail sector. Truly understanding individual customer buying patterns and being able to differentiate these will become increasingly more important for the sector.”

Fibre2Fashion News Desk (KD)