- UK retail sales values were up 2.2% on a like-for-like basis from July 2012, when they had increased 0.1% on the preceding year. On a total basis, sales were up 3.9%, against a 2.0% increase in July 2012, the fastest July growth since 2006. In real terms, total growth was 4.4%, the fastest since April 2011.
- The sunny weather boosted the food and fashion categories while dampening the home categories – Furniture & Flooring, Home Accessories and House Textiles – as well as internet sales.
- Online sales were up 7.9% compared with July 2012, when they had risen by 15.6%.
Helen Dickinson, Director General, British Retail Consortium, said: "This is a very solid sales performance, the second best month this year and better than we’ve seen in any July since 2006. It has been driven by the warm weather and retailers working hard to offer deep discounts and great offers to their customers, with the reduction in shop prices we reported for July translating into more generous spending in UK stores.
"Food has performed very strongly, with summer barbecue ingredients and feel-good foods doing well during a month where the Lions, Murray, Chris Froome in the Tour de France and the start of the Ashes series all contributed to the positive summer feeling. Clothing has also had a very good month, which was down to good weather spurring summer fashion buys and some very good discounting.
"While we know that the picture is still variable and the High Street in particular continues to face considerable challenges, these positive results will be welcomed in town centres around the country that depend so much on retailers performing well."
David McCorquodale, Head of Retail, KPMG, said: "July was a golden month for retail sales and marks a return to form for British retailers. Hopefully this uptick in sales is another indication that the UK economy has turned the corner towards growth. Murray mania, summer sun and the arrival of the royal baby gave consumers that much needed feel good factor, encouraging them to leave caution behind and help retailers put in a champion performance.
"Sales of food and drink soared as consumers popped open the bubbly and held barbecues to celebrate the royal family’s newest arrival, Murray’s Wimbledon triumph and the warm delights of summer. For the British consumer, it seems good things come in threes! Whilst this month’s figures will be a relief after last year’s washout summer saw shoppers stay at home, some of these sales were heavily driven by discounting. Whether retailers have sacrificed too much margin to drive these sales remains to be seen.
"With autumn ranges now hitting the shelves, retailers need some cooler weather to encourage consumers to treat themselves to some new winter woollies. If they get these new ranges right and suitable weather, it could be game, set and match."
Food & Drink sector performance – Joanne Denney-Finch, Chief Executive, IGD, said: "The sustained summer heatwave and British sporting success helped food and drink sales achieve their best July performance for five years.
"The middle two weeks of the month were particularly strong, with supermarkets reporting a big increase in the sale of burgers, sausages and other barbecue-related food.
"July’s strong food and drink data, together with the positive GDP figures are among various signs pointing to growing optimism. Our ShopperVista research shows 60 per cent of shoppers expect their personal economic circumstance to improve or stay the same, compared to 52 per cent a year ago."
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.
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 (LFL) 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. 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.
Online (including mail order and phone) sales of non-food are transactions which take place over the internet, or via mail order or phone. Online sales growth is the percentage change in the value of online 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 online sales are still a small proportion of total UK retail sales. Estimates based on ONS figures show about 9 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 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 the same 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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British Retail Consortium
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mobile: 07733 453065
The August 2013 Monitor, covering the four weeks 28 July – 24 Aug, will be released at 00.01am Tuesday 3 September 2013.
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.
Sponsored and Administered by
KPMG LLP, a UK limited liability partnership, is a subsidiary of KPMG Europe LLP and operates from 22 offices across the UK with over 10,000 partners and staff. The UK firm recorded a turnover of £1.8 billion in the year ended September 2012. KPMG is a global network of professional firms providing Audit, Tax, and Advisory services. We operate in more than 156 countries and have more than 152,000 professionals working in member firms around the world. The independent member firms of the KPMG network are affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity. KPMG International provides no client services.
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