- UK retail sales values were 0.6% higher on a like-for-like basis from July 2010, when sales had risen 0.5%. On a total basis, sales were up 2.5%, against a 2.6% increase in July 2010.
- Food sales growth picked up in July after a poor June. Clothing and footwear picked up after a tough June, helped by clearance sales. Homewares were mostly down on a year ago and often promotion-led. Consumer caution continued to hit big-ticket housing-related purchases.
- Non-food non-store (internet, mail-order and phone) sales growth slowed after June’s clearance-led uplift. Sales were 9.6% higher than a year ago, compared with 11.5% in June and 11.3% in July 2010.
Stephen Robertson, Director General, British Retail Consortium, said:
"This is a modest improvement on recent months but overall conditions remain very difficult for retailers. When you take into consideration inflation and January’s increase in VAT, 2.5 per cent growth effectively means people are buying fewer goods.
"Food sales continue to outperform non-food with inflation helping to drive top-line growth. But shoppers were only tempted into stores by an unprecedented number of promotions which come at the expense of margins. Sales of non-food goods barely grew, though clearance events helped summer clothing in particular.
"Growing fears of a global economic slowdown and a sovereign debt crisis have sent shockwaves through financial markets. Policymakers in Europe and the US must act quickly to implement a coordinated and credible strategy to reduce public sector deficits while supporting growth. Business and consumer confidence needs to be restored quickly before spending paralysis sets in."
Helen Dickinson, Head of Retail, KPMG, said:
"July was a better month than June, seeing an improving trend for the food sector and an uplift for clothing when the good weather finally kicked in. However, retailers of big-ticket items continue to find the market conditions challenging, with customers still reluctant to make major spending commitments.
"With pay rises hard to come by, consumers continue to feel the squeeze of higher prices and an uncertain outlook. Retailers are hunkering down and managing stock tightly and none is particularly optimistic about the outlook, although many expect inflationary pressures to decrease in the latter part of the year."
Food & Drink – Joanne Denney-Finch, Chief Executive, IGD, said:
"July’s food and drink sales show some encouraging improvement, partly due to better weather towards the end of the month. The new wave of fuel-related promotions by supermarket retailers may have succeeded in bringing forward some purchasing.
"Our latest ShopperTrack research reveals 51% of people say they are checking the price of every single item they put in their shopping basket. A similar number of shoppers are comparing prices between products and between stores. Food retailers, together with manufacturers, are responding with new ways to help shoppers keep to a budget via coupons, meal deals and price campaigns."
Non-Food Non-Store* - Stephen Robertson, Director General, British Retail Consortium, said:
"This is good growth compared with the high street where non-food sales are barely growing at all but it's well down on the double-digit results we've seen for non-store sales in most of the months since we began this measure in October 2008.
"Apart from March, when sales were reduced by this year's later Easter, this is the weakest growth for non-store sales of non-food goods for almost two years. The long-term progress of online retailing means internet shopper numbers and how much they're buying continue to increase but the squeeze on household budgets is causing that to slow as people cut back where they can."
Notes
The BRC-KPMG Retail Sales Monitor measures changes in the actual value (including VAT*) of retail sales, excluding automotive fuel. The Monitor measures the value of spending and hence does not adjust for price or VAT changes. If prices are rising, sales volumes will increase by less than sales values. In times of price deflation, sales volumes will increase by more than sales values.
Retailers report the value of their sales for the current period and the equivalent period a year ago. These figures are reported both in total and on a ‘like-for-like’ basis.
* VAT changes: from 17.5% to 15% on 1st Dec 2008; to 17.5% on 1st Jan 2010; to 20.0% on 4th Jan 2011.
Total sales growth is the percentage change in the value of all sales compared to the same period a year earlier. The total sales measure is used to assess market level trends in retail sales. It is a guide to the growth of the whole retail industry, or how much consumers in total are spending in retail – retail spending represents approximately one-third of consumer spending. It is this measure that is often used by economists. Many retailers include distance sales as a component of total sales.
'Like-for-like' sales growth is the percentage change in the value of comparable sales compared to the same period a year earlier. It excludes any spending in stores that opened or closed in the intervening year, thus stripping out the effect on sales of changes in floorspace. Therefore like-for-like sales growth will always be lower than total sales growth. Many retailers include distance sales as a component of like-for-like comparable sales.
The like-for-like measure is often used by retailers, the city and analysts to assess the performance of individual companies, retail sectors and the industry overall, without the distorting effect of changes in floorspace.
Non-Food Non-Store sales are transactions which take place over the internet, or via mail order or via telesales. Non-Food Non-Store sales growth is the percentage change in the value of all non-food non-store sales compared to those in the same period a year earlier. It is a guide to the growth of sales made by this non-store channel. It should be noted that Nonfood Non-store sales are still a very small proportion of total UK retail sales. Estimates based on ONS figures show about 8 per cent of total UK retail sales (food and non-food) are achieved via the non-store channel.
The responses provided by retailers within each sales category are re-weighted (based on ONS weightings) to reflect the contribution of each category to total retail sales, thus making it representative of UK retail sales as a whole. Because the figures compare sales this month with the comparable period last year, a seasonal adjustment is not made. However, changes in the timing of Bank Holidays and Easter can create distortions, which should be considered in the interpretation of the data.
As well as receiving sales value direct from the retailers in the scheme the BRC-KPMG Retail Sales Monitor also receives food and drink sales value data from the IGD's Market Track Scheme.
In its role as sponsor of the BRC-KPMG Retail Sales Monitor, KPMG is responsible for the aggregation of the retail sales data provided by the retailers on a weekly basis. This data consists of the relevant current week’s sales data and comparative sales figures for the same period in the prior year. The aggregation has been performed by KPMG on data for periods following 2 April 2000 and equivalent prior periods. The accuracy of the data is entirely the responsibility of the retailers providing it.
The sponsorship role has been performed by KPMG since 10 April 2000 and save for the aggregation of comparative sales figures for the period from 2 April 2000 it is not responsible for the aggregation of any data included in this Monitor relating to any period prior to 2 April 2000. The commentary from KPMG is intended to be of general interest to readers but is not advice or a recommendation and should not be relied upon without first taking professional advice. Anyone choosing to rely on it does so at his or her own risk. To the fullest extent permitted by law, KPMG will accept no responsibility or liability in connection with its sponsorship of the Monitor and its aggregation work to any party other than the BRC.
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The August 2011 Monitor, covering the four weeks 31 July – 27 August 2011, will be released at 00.01am Tuesday 6th September 2011.
The data is collected and collated for the BRC by KPMG.
The British Retail Consortium (BRC) is the UK's leading retail trade association. It represents the full range of retailers, large and small, multiples and independents, food and non-food, online and store based.
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