The belated arrival of summer has given retail sales a much-needed boost, with shoppers splashing out on clothing and beauty products in anticipation of the holiday season.
According to the latest figures from the British Retail Consortium (BRC) KPMG Retail Sales Monitor, total retail sales saw a modest increase of 0.5 percent year on year in July, although this pales in comparison to the 1.5 percent growth seen in 2023.
Food sales enjoyed a 2.6 percent rise over the three months to July compared to last year, but this was significantly lower than the previous year’s robust 8.4 percent expansion.
Non-food items didn’t fare as well, with sales dipping by 1.7 percent year on year over the same quarter, a steeper decline than the 0.5 percent drop recorded in July 2023. Consumers’ spending on holidays and entertainment squeezed out sales of indoor goods like furniture and household appliances.
Helen Dickinson, BRC chief executive, commented: “The late arrival of British sunshine led to a better month for summer clothing and health and beauty products as shoppers prepared for days out with friends and holidays away.”
Linda Ellett, UK head of consumer, retail and leisure at KPMG, said: “While summer staples, such as health, beauty, and gardening products have helped to drive retail sales growth both online and in-store in July, the upturn is likely much less than retailers were hoping for at this key time of the year.”
She added: “A busy summer of televised sport has played a beneficial role in increasing TV, mobile and tablet sales over the last two months, but there’s little evidence of other big-ticket purchases taking place.”
“Spending levels continue to be governed by whether households have been able to absorb the likes of mortgage and rent increases, or had to limit their spend elsewhere as a consequence. Also, while some sectors are seeing wage growth, others are cutting posts, leaving some consumers mindful that they may need to fall back on savings if they find themselves out of work.”
Barclays has released separate figures showing a 0.3 percent year-on-year drop in consumer card spending in July. The mixed weather throughout the month, coupled with selective discretionary spending, continued to present challenges for retailers.
Despite the arrival of warmer days and delayed summer sales leading to a slight recovery for retail, 39 percent of consumers reported that July’s rainy weather caused them to reduce “summer spending”.
The average Briton cut their expenses by £133.40, with those aged between 18 and 34 making the most significant cuts at £158.40.
Pubs, bars and clubs experienced a 4.9 percent increase in July, marking the category’s highest growth since January. This was largely due to football fans gathering at their local pubs to watch the final rounds of the Euro 2024 tournament, according to Barclays data.
Karen Johnson, head of retail at Barclays, commented: “Shoppers and retailers alike will be ready to see the end of the summer showers. It’s encouraging to see seasonal staples such as barbecue supplies, beauty buys and holiday planning delivering signals of steady recovery.”
“Despite England losing in the nail-biting final of the Euros, UK hospitality emerged as a true winner, when the Euros delivered a boost for pubs, bars and clubs.”
“With the final days of the Olympics in Paris, Taylor Swift’s return to a sold-out Wembley Stadium for her final UK Eras Tour dates, and a heatwave on the cards, we hope summer spending will finish strongly in August.”
