UK heatwave fails to spark July spending spree

UK heatwave fails to spark July spending spree

Figures from the British Retail Consortium KPMG sales monitor showed that in July, retail sales increased by 0.5% on a like-for-like basis compared to the same month in 2017.

This compares to a rise of 1.1% in June, when the World Cup and hot weather delivered a twin boost to a sector under pressure, bolstering beer, barbecue and big TV sales.

This is despite food sales having their best July in five years.

Fans and cooling equipment were popular purchases, but furniture, computing and footwear all registered declines.

British Retail Consortium chief executive Helen Dickinson said Last month’s sweltering temperatures kept shoppers focused 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.

A separate survey by Barclaycard showed that consumer spending rose 5% year-on-year in July, marking the strongest three-month period since 2014.

Essential spending climbed 8.7% in July, driven by a strong rise in supermarkets of 6.7%.

England’s World Cup performance helped lift pub spending by 16.8% in July, the biggest increase since April last year, according to Barclaycard.

Overall, consumers spent 41% more in pubs on England match days than on the equivalent days in 2017, rising to 73% on the day of the England vs Croatia semi-final.

Paul Martin, UK Head of Retail at KPMG said 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 and 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.

News Source SkyNews

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