UK July Sales Moderate Slightly in June: BRC

UK Jul Like For Like Retail Sales +0.9% Y/Y Vs Jun +1.2%

By Jamie Satchithanantham

     LONDON (MNI) - The pace of UK consumer spending remained stable despite

slowing in July, underpinned by robust demand for food over the early Summer

period, a survey published Tuesday showed.

     The British Retail Consortium Retail Sales Monitor reported July

like-for-like sales rose +0.9% on the year, below the +1.2% y/y seen in June,

and total sales rose 1.4%, below the 2.0% level set in June.  

     The base effect from strong performances last year, where sales were up

1.1% y/y on a like-for-like basis and 1.9% y/y on a total basis, meant that in

context this July's data were fairly solid. 

     The picture painted in July was one of strong sales of food items, with

food driving growth, while that of non-food items struggled, further fuelling

concerns of falling consumer spending on non-essential goods as inflation

continues to eat into households' real incomes.   

     In the three months to July, effectively covering the start of this Summer,

food sales were up +2.3% 3m y/y on a like-for-like basis and +3.4% 3m y/y on a

total basis. 

     These figures were weaker than those recorded in the three months to June

(+3.6% 3m y/y like-for-like, +4.7% 3m y/y total) but drastically better than

those recorded 12 months ago (-0.8% 3m y/y like-for-like, +0.8% 3m y/y total).

     In contrast, non-food sales fell 0.7% 3m y/y on a like-for-like basis, the

worst performance the three months to March, and decreased 0.4% 3m y/y on a

total basis, also the lowest since the three months to March.

     June's figures were boosted by its historically warm weather, known to

entice shoppers out to the shops. As the temperature scaled back in July so did

sales values.     

     "The month's growth was underpinned by food sales alone, while non-food

sales relapsed into negative territory as the competition heats up over a

shrinking pool of discretionary consumer spending power," Helen Dickinson, Chief

Executive, British Retail Consortium said.

     "Against a backdrop of increased consumer borrowing and shrinking real

wages, we can expect food to continue making the running for sales growth for

the time-being, although driven more by price than volume, with non-food

continuing to struggle," she added.  

     The BRC-KPMG Retail Sales Monitor measures retail sales in value terms, and

not volume terms like the official data published by the Office of National

Statistics, and is thus culpable of having its figures boosted by inflation. 

--MNI London Bureau; +44 203-586-2226; email: jamie.satchithanantham@marketnews.com

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

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