Retail sales rise for second month in a row

Total sales increased by 3.2% in July, against an increase of 0.5% in July 2019, marking the second consecutive month of growth since the start of the pandemic.

According to the latest BRC-KPMG retail sales monitor, UK retail sales increased by 4.3% in the month against the year prior, following a release of pent up demand in the wake of the crisis. 

Fortunes were “heavily polarised”, however, and over the three months to July, in-store sales of non-food items declined 29.3% on a total and 11.3% on a like-for-like basis. Like-for-like sales excluding temporarily closed stores remained in decline

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In the same three-month period, food sales rose by 8.2% on a like-for-like basis, and 6.1% on a total basis, marking the highest rise since June 2009, and higher than the 12-month total average growth of 3.2%

Non-food retail like-for-like sales increased by 7.9% in the same period, but declined 4.3% on a total basis.

Online sales continued to “remain prominent”, accounting for over 40% of sales in July, with online non-food sales up by 41% in the month.  

Food and home focussed categories like furniture, such as homewares and kitchen accessories remained “among the strongest performers”, while computing equipment also “soared” amid the rise of home-working

Paul Martin, UK head of retail at KPMG, said: “While social distancing restrictions have eased and our daily lives have started to return to a degree of normality, shoppers are still focussed on life at home for the most part. 

“September will be the real test for retailers this quarter, traditionally being a month of high volumes driven by the return to school after the holiday season.” 

He added: “That said, with the furlough scheme unwinding and wider economic uncertainty set for the autumn, consumer anxiety will likely rise along with it. This will place more scrutiny on disposable income and make life even tougher for retailers.”

Helen Dickinson, CEO of the BRC, said: “While the rise in retail sales is a step in the right direction, the industry is still trying to catch up lost ground, with most shops having suffered months of closures. 

“The fragile economic situation continues to bear down on consumer confidence, with some retailers hanging by only a thread in the face of rising costs and lower sales.” 

She added: “Rents are also continuing to accumulate and the next Quarter Rent Day could see many otherwise viable businesses fall into insolvency, costing stores, jobs and economic growth. 

“The Government should adopt the proposal from landlords and tenants for a Property Bounceback Grant, which would deliver £7bn in tax revenue to the Exchequer and save 375,000 jobs.” 

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