According to figures released this week by the ONS, retail sales grew by 4.2% compared to last year in value terms (not-seasonally adjusted), down from 5.3% last month. While the ONS has persistently reported much higher sales growth than the BRC-KPMG Retail Sales Monitor, the figures paint a similar picture to those we released earlier this month, with growth slowing in July, but still holding up despite the pressures on consumer incomes.
Underneath the headlines, the ONS figures also confirm that year on year growth in the sales of Food stores has picked up from 1.8% in June to 3.0% in July; although much of the growth is down to price inflation. In contrast sales in Non-Food Stores have slowed: as a greater proportion of consumer’s weekly spending is going towards the necessities, non-food retailers are having to compete for discretionary spending as consumer incomes are squeezed.
Online sales growth has also slowed from 16.4% in June to 15.6% in July. Whilst sales are still growing rapidly, the growth rate is down from 17.8% at this point last year, in contrast to total sales, which are actually growing faster than July 2016. This suggests that even the national statistics are detecting the first signs of the online market maturing.