Period covered: July 18Published: August 07, 2018Read time: 1min

Retail Sales Monitor

Food and Fans for July, but Furniture Forgotten

Helen Dickinson OBE, Chief Executive, BRC: 

“Last month’s sweltering temperatures kept shoppers focussed on eating, drinking and keeping cool. Food sales had their best July in five years, while fans and cooling equipment flew off the shelves.

“However, total sales growth slowed as the heat laid bare the underlying weakness in consumer spending. Sales of non-food products struggled - three months into an extended period of summer weather, demand for many seasonal purchases has slowed while the heat has kept shoppers away from days spent browsing new ranges. For many in the industry, Autumn could not come sooner.

“Although the weather generates a shift in month-to-month spending, trend growth remains very low by historical standards. Physical stores have been particularly affected by pressures on consumers while costs borne by retailers have continued to rise. Over the last year, in-store sales of non-food products fell 2.5 per cent, at the same time as business rates bills increased nearly 3 per cent.

“Although changing consumer behaviour means we will have fewer shops in future, the reality is that if we want to support a positive reinvention of our high streets, business rates cannot go on increasing.”

Paul Martin, Head of Retail, KPMG: 

“For all the hopes placed on the World Cup and the glorious weather, it seems retail sales still fell short of expectations, growing only 0.5 per cent on a like-for-like basis in July 2018. It was perhaps just too hot to hit the high street!

“Unsurprisingly, food & drink fuelled the majority of sales growth thanks to summer BBQs, picnics and football festivities, whilst elsewhere growth was mainly witnessed among the holiday essential categories, including health & beauty, deck chairs and fashion. This was particularly true when comparing the high street to online, with the latter faring considerably better.

“July’s performance reinforces the fact that it will take more than events-based retail and sunshine to improve the health of the high-street. Retailers must improve efficiency, in many cases reinvent themselves and adapt to the changing retail environment, including last week’s interest rate rise.”

Food & Drink sector performance, Joanne Denney-Finch, Chief Executive, IGD: 

“July’s food and grocery sales were a reason to celebrate after the best year-on-year uplift since July 2013. Beverages fared best of all thanks to England’s World Cup Semi-Final appearance and exceptionally hot weather throughout.

“Although the short to medium term outlook involves a lot of uncertainties, most shoppers are optimistic for the longer term. 60 per cent are looking forward to the future and 72 per cent are hopeful that their lives will be better.”