UK retail sales growth eases in July
Retail sales growth slowed last month, according to the latest figures from the British Retail Consortium-KPMG sales monitor, as spending on food, drink and fans in the heatwave failed to offset a broader slowdown.
Sales were up 0.5% on a like-for-like basis compared to the same month last year, down from a 1.1% increase in June and missing expectations of 1.5% growth. Meanwhile, total sales growth dipped to 1.6% year-over-year from 2.3% in June.
It seems the hot weather may have put shoppers off from hitting the high street, with online sales performing better.
BRC chief executive Helen Dickinson said: "Last month’s sweltering temperatures kept shoppers focussed on eating, drinking and keeping cool. Food sales had their best July in five years, while fans and cooling equipment flew off the shelves.
"However, total sales growth slowed as the heat laid bare the underlying weakness in consumer spending. Sales of non-food products struggled - three months into an extended period of summer weather, demand for many seasonal purchases has slowed while the heat has kept shoppers away from days spent browsing new ranges. For many in the industry, autumn could not come sooner."
Shore Capital analyst Clive Black said the figures reflect, to some degree, the ongoing impact of the hot weather on the behaviour of the British.
"Given that Mr Sunshine has been shining effectively since May 2018, folks are now well into seasonal food consumption, so lots of fresh produce, BBQ lines and drinks, whilst reducing their browsing on the high street as the heat keeps many people in their gardens, in the parks or at the beaches of these Isles."
Samuel Tombs, chief UK economist at Pantheon Macroeconomics, continues to expend consumer spending to grow only at a modest rate even when the weather-drag on sales has faded.
"Real wage growth will strengthen gradually, but business surveys point to a slowdown in employment growth over the next six months, while the recent increase in Bank Rate will take more momentum out of the housing market, hitting confidence," Tombs said.