Retail Sales Monitor
Rain Dampens Freedom Day Demand
Helen Dickinson OBE, Chief Executive, BRC:
July continued to see strong sales, although growth has started to slow. The lifting of restrictions did not bring the anticipated in-store boost, with the wet weather leaving consumers reluctant to visit shopping destinations. Online sales remained strong, and with weddings and other social events back on for the summer calendar, formalwear and beauty all began to see notable improvement, so fashion outlets in particular saw a bounce back to pre-pandemic levels. As many people prepare to return to the workplace, purchase of home office equipment began to fall after month of high sales, meanwhile other homeware, such as furniture and household appliances continued to do well.
However, the vacancy rate is continuing to rise. Many shops and local communities have been battered by the pandemic, with many high streets in need of further investment. Unfortunately, the current broken business rates system continues to hold back retailers, hindering vital investment into retail innovation and the blended physical-digital retail offering. The Government must ensure the upcoming business rates review permanently reduces the cost burden to sustainable levels. Retailers want to play their part in building back a better future for local communities, and Government must give them the tools to do so.
Paul Martin, Retail Partner, KPMG:
Retail sales continued to grow in July, although at a slower rate as the reopening of the hospitality and leisure sectors led to a dilution in consumer spending.
Whilst the high street saw continued growth in July, with sales up 6%, unsurprisingly online sales fell back - although less than expected - by -0.4% compared to July 2020. Both women’s and men’s clothing continued their revival with strong growth in-store and online. Many other non-food categories had a less strong performance, especially those related with the home after the house moving frenzy of recent months started to abate. With better weather and school holidays underway, consumers are happy to shop for clothes, shoes and accessories for those much needed social events.
“Over the coming months the health of the sector is expected to grow at a much slower rate as retailers face increasing challenges on a number of fronts. Staffing pressures, increases in commodity and component costs, rising inflation eating into households’ spending power and stalling consumer confidence could lead to a slowdown in retail sector growth as we head into autumn.”
Food & Drink sector performance, Susan Barratt, CEO, IGD:
UK food and drink sales returned to growth in July, following several months where sales struggled to match the high peaks of sales generated post-Easter in 2020. As well as the Euro 2020 football tournament, the UK experienced two exceptional weeks of hot weather in July, providing ample opportunities for shoppers to celebrate with food and drink.
However, while sales were boosted in July, looking forward there are many challenges to overcome. The UK’s K-shaped recovery persists; IGD’s ShopperVista insight reveals higher income groups believe they are more likely to be better off financially (23%) than worse off (20%) in the year ahead. In contrast, lower income groups are more likely to believe they will be worse off (23%) than better off (15%). Furthermore, shoppers are increasingly concerned about food and grocery price inflation, with 16% of shoppers expecting that prices will get much more expensive in the year ahead, up from just 8% of shoppers in April’21.