Retail sales rise but outlook bleak - BRC
Retail sales rose for the second month running in July after Covid-19 restrictions were relaxed but the industry said the outlook remained bleak as many store owners struggled to survive.
Total retail sales increased 3.2% in July from a year earlier and like-for-like sales rose 4.3%, the British Retail Consortium-KPMG sales monitor showed.
The survey reported two months of improvement after sales fell 5.9% in May and 19% in April when only retailers classed as essential by the government were allowed to stay open. Sales in July were boosted by sharp increases in online shopping - online non-food sales rose 41% and the penetration rate increased to 32% from 29.7% a year earlier.
Food, furniture and homeware had the strongest growth as people spent more time at home but fashion, jewellery and beauty retailers struggled for the same reason. Like-for-like in-store non-food sales fell in July.
Consumers are wary of going to the shops and making impulse purchases with extreme uncertainty hanging over the economy, the BRC said. Retailers such as John Lewis, Boots and WH Smith have announced thousands of job cuts and economists fear there is worse to come as the government withdraws support for jobs.
Helen Dickinson, the BRC's chief executive, said: "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."
After two months of very strong growth, food and grocery sales slowed in July and appeared to be moving towards pre-lockdown behaviour by shoppers. Alcohol sales are still a big part of supermarkets' growth but less so than in May and June when hot weather and the shutdown of bars and restaurants sent sales surging.
Paul Martin, KPMG's UK head of retail, said: "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. 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."