- UK retail sales values were up 1.4% on a like-for-like basis from June 2011, when they were down 0.6% on a year ago. On a total basis, sales were up 3.5%, against a 1.5% rise in June 2011.
- The Jubilee celebrations and warm weather saw a strong start to trading period. Food and drink, clothing and footwear and online all performed particularly well during the week preceding the Jubilee.
- The remainder of the month proved much more challenging throughout the sector. Discretionary and big-ticket items continued to struggle as consumers‟underlying caution about the economy, jobs and their personal finances curtailed spending.
- Online (including mail-order and phone) sales of non-food items showed stronger growth, up 12.1% against growth of 11.5% last year. Sales growth returned to levels more consistent with the 12-month average.
Stephen Robertson, Director General, British Retail Consortium, said: "It was the bunting boost. June was saved by the feelgood lift of the Jubilee, showing how crucial these temporary factors are in our difficult trading conditions.
"A trip to the shops played a big part in preparations for the occasion. The week leading up to the long weekend was a stand-out for the retail sector. Food and clothing and footwear retailers had the best of it as people bought in special food and drink and, encouraged by warmer weather, some treated themselves to shorts, dresses and sandals.
"Sadly the soggy celebrations over the Jubilee weekend itself, which heralded the start of the wettest June on record, were followed by far weaker business for the rest of the month. Belts were tightened again and the lower temperatures cooled demand for summer fashions and outdoor leisure goods.
"With the first half of the year complete, we can see total sales growth between this January and June was no better than in 2011. It‟ clear a permanent upturn in confidence and spending has yet to happen. Scrapping next month‟ fuel duty rise will help hard-pressed customers and businesses. The Government needs to be equally supportive as it considers where next for other costs it controls."
Helen Dickinson, Head of Retail, KPMG, said: "In June, following a mini Jubilee boost, most sectors achieved positive like-for-like growth for the month as a whole. However, women‟s clothing continues to find the going tough because fashion spending is especially discretionary and we‟ve all forgotten what the sun looks like. The double whammy of uncertain sales levels and ongoing promotional activity continues to hit profits and cash flows."
"Retailers are fervently hoping that the summer of sport will raise cash for their coffers. But the reality is that any benefit from the Olympics will probably be concentrated in the South East and provide more of a boost for food than non-food. Overall there will be plenty of hype, a short term blip of benefit, and then back to normality and the challenges that brings."
Food & Drink – Joanne Denney-Finch, Chief Executive, IGD, said: "The first week of June was the second biggest food and grocery sales period of the year after the Easter week, with alcohol selling particularly well. But the record rainfall meant this boost fizzled out as the month progressed. England doing a little better than expected in Euro 2012 did not seem to help.
"With the Olympics fast approaching, food and grocery companies will hope for a more sustained increase in sales. While shoppers are prepared to treat themselves during big events, in these tough times value still remains important. Over half of shoppers (53 per cent) told us they are only interested in products featured in a themed event if they are on promotion."
Online* (Non-Food) - Stephen Robertson, Director General, British Retail Consortium, said: "The build-up to the Diamond Jubilee delivered the biggest benefit to retailing overall but, because it was wet, the extra bank holiday boosted online retailing while failing to do much for store sales.
"People spent more time indoors, able to access online retailers easily, rather than brave the miserable conditions outside.
"Those retailers that are offering a sophisticated multi-channel operation found reserving online to collect in store continued to show strong growth. Customers‟ use of mobile devices is also expanding very rapidly but from a low base."
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. 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 very 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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The July Monitor, covering the four weeks 1st July - 28 July, will be released at 00.01am Tuesday 7th August 2012
About the British Retail Consortium
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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