MNI DATA ANALYSIS: Jul UK Shop Sales Below 3-mo average

--BRC July Like-for-Like Sales Up 0.5% y/y; Total Sales Up 1.6%

     LONDON (MNI) - UK retail sales growth continued its recovery in July from a

record decline in April, albeit at a slower pace than in May. The British Retail

Consortium (BRC)-KPMG survey showed that growth was predominantly driven by the

warm weather and World Cup, which led shoppers to buy food and drink for summer

barbeques, picnics and football-related festivities.

     July like-for-like sales rose by 0.5% from July 2017, when they had

increased by 0.9% y/y. Furthermore, total sales growth of 1.6% was below the

3-month average of 2.7%, but in line with the 12-month average.

     --WEATHER DROVE GROWTH

     Warm weather in July, alongside the World Cup meant grocery sales growth

continued its strong run, bolstered by added enthusiasm for picnics and

barbeques. Food sales increased by 3.1% y/y on a like-for-like basis and 4.5% on

a total basis. Not only was this above the 12-month total average growth of

3.8%, it was also the strongest monthly performance since July 2013, excluding

Easter distortions. Clothing and household appliances also saw uplifts, but

larger discretionary sectors such as furniture did not experience similar upward

momentum.

     Non-food store sales saw a tempering in the pace of decline. Over the three

months to July, they decreased by 2.4% on a like-for-like basis and by 1.0% on a

total basis. This is slightly softer than the 12-month total average decrease of

2.5% and is the best total 3-month average since June 2017.

     --WORLD CUP BOOST

     Food and grocery sales -- especially those of beverages -- grew strongly in

July, with the World Cup being a key driver. "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," noted Joanne Denney-Finch, Chief

Executive at IGD.

     Whilst food and grocery sales saw healthy growth, other areas did not fare

so well. "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,"

Helen Dickinson OBE, Chief Executive of the British Retail Consortium, said.

     Furthermore, the positive data must be viewed in the context of structural

changes that retailers need to be prepared for. "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," Paul Martin, UK Head of Retail at KPMG, said.

--MNI London Bureau; +44 203 865 3828; email: jai.lakhani@marketnews.com

--MNI London Bureau; +44 207-862-7489; email: ukeditorial@marketnews.com

--MNI London Bureau; tel: +44 203-586-2225; email: les.commons@marketnews.com

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