Beer, barbecues and big screen TVs boost retail sales
Beer, barbecues and large screen TVs were some of the big sellers across the country, easing some of the pain of the struggling sector.
UK retail sales increased by 2.3 per cent in June, way above the three-month and 12-month averages of 1.2 per cent and 1.5 per cent respectively.
But spending on many other items fell, according to the latest analysis from KPMG and the British Retail Consortium’s latest retail monitor, covering the five weeks from May 27 to June 30.
Helen Dickinson, chief executive of the British Retail Consortium, said: “Beer, barbecues and big TVs lifted June’s sales as warm weather and world cup fever gripped the nation.
“However, with consumers engrossed in the agony and ecstasy of each match, spending on many other items fell. In the end, June scored solid, but not sensational, sales.
“The reality is that sales don’t grow on the feel-good factor alone. With household incomes still barely growing faster than inflation, conditions for consumers and retailers remain extremely tough. And things could get tougher: once the euphoria of sporting success subsides, without a deal on Brexit, shoppers face the prospect of significant price increases and shortages of everyday goods. Even if England do go all the way, households may have little to celebrate come next April.”
Online sales of non-food products grew 8.5 per cent in June, against a growth of 10.1 per cent in June 2017. This is below the 3-month average of 9 per cent but above the 12-month average of 7.9 per cent.
Online penetration rate increased from 22.3 per cent in June 2017 to 23.3 per cent in June 2018.
Over the three months to June, in-store sales of non-food items declined 1.4 per cent on a total basis and 2.7 per cent on a like-for-like basis. This is an improvement over the 12-month Total average decline of 2.4 per cent.
Over the three months to June, food sales increased 0.3 per cent on a like-for-like basis and 1.7 per cent on a total basis. This is below the 12-month total average growth of 3.7 per cent but includes April, which was negatively distorted by the timing of Easter.
Over the three-months to June, non-food retail sales in the UK decreased 0.2 per cent on a like-for-like basis and increased 0.8 per cent on a total basis. This is higher than the 12-month Total average decrease of 0.1 per cent and the best 3-month average since September.
It was the second consecutive month of growth in non-food.
Sue Richardson, head of retail at KPMG in the North of England, said: “After May’s positive retail performance, June’s results turned out to be less buoyant than hoped for.
“Sales growth remained in positive territory for the second month running at 2.3 per cent, but as the recent financials of key players’ highlights, sales growth and profitability don’t always go hand-in-hand.
“Grocers benefitted from the brighter weather and of course the World Cup, with barbeques and picnics firmly on the menu, and the weather and holiday season are also likely to be behind the uptick in online fashion sales too. But with so much attention outdoors, other household categories didn’t fare exceptionally well.
“The summer sunshine, Wimbledon and the on-going World Cup provide a strong foundation for growth in July, but retailers need to ensure that sales translate into profit. With the structural changes the sector is experiencing, as well as increased costs, this is becoming increasingly difficult to achieve.”
Joanne Denney-Finch, chief executive, IGD, said: “June was another positive month for food and grocery, thanks largely to exceptional sales of drinks in the final week due to hot weather and World Cup festivities.
“Underneath the spending figures there has been a notable rise in ethical interest this year. Animal welfare, the environment and support for local producers are all increasingly important to shoppers. For instance, 44 per cent of British shoppers now say the environment is very important when choosing grocery products, the highest we have ever seen.”