Heatwave helps UK food sales throughout July

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Consumers throughout February were reluctant to shop following concerns and uncertainty around Brexit, leading to a decline in growth.

The good weather continued throughout July with food and drink sales increasing, as well as cooling equipment.  This suggests that any growth in recyclable material arisings will come from grocers rather than non-food shops. 

According to the latest data from the British Retail Consortium/KPMG Retail Sales Monitor for July, UK retail sales increased by 0.5% on a like-for-like basis from July 2017, when they increased by 0.9% from the preceding year.  

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On a total basis, sales increased by 1.6% in July compared to an increase of 1.4% in July 2017.  

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This is below the 3-month average of 2.7%, but in line with the 12-month average of 1.6%.  

Over the three months up to July, in-store sales of non-food items decreased by 1.0% on a total basis and by 2.4% on a like-for-like basis.  

This is higher than the 12-month total average decline of 2.5% and the best total 3-month average since July 2017. 

During the same period up to July, food sales increased by 3.1% on a like-for-like basis and by 4.5% on a total basis.  

This is higher than the 12-month total average growth of 3.8%, with the monthly performance being the best since July 2013, excluding Easter distortions.  

Within the same timeframe, non-food retail sales in the UK increased by 0.2% on a like-for-like basis and 1.2% on a total basis.  

This is above the 12-month total average decrease of 0.2% and the best 3-month average since June 2017. 

However, after two months of growth, July sales declined.   

Online sales of non-food items grew by 7.5% in July, compared to the growth of 8.3% in July 2017.  

This is under the 3-month and 12-month averages of 9.2% and 7.9% respectively. The online penetration rate increased from 22.4% in July 2017 to 24.1% in July 2018.  

British Retail Consortium 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. 

“Although the weather generates a shift in month-to-month spending, trend growth remains very low by historical standards. Physical stores have been particularly affected by pressures on consumers while costs borne by retailers have continued to rise. Over the last year, in-store sales of non-food products fell 2.5%, at the same time as business rates bills increased by nearly 3%.  

“Although changing consumer behaviour means we will have fewer shops in future, the reality is that if we want to support a positive reinvention of our high streets, business rates cannot go on increasing.”

KPMG UK head of retail Paul Martin said: “For all the hopes placed on the World Cup and the glorious weather, it seems retail sales still fell short of expectations, growing only 0.5% on a like-for-like basis in July 2018. It was perhaps just too hot to hit the high street! 

“Unsurprisingly, food & drink fuelled the majority of sales growth thanks to summer BBQs, picnics and football festivities, whilst elsewhere growth was mainly witnessed among the holiday essential categories, including health & beauty, deck chairs and fashion. This was particularly true when comparing the high street to online, with the latter faring considerably better. 

“July’s performance reinforces the fact that it will take more than events-based retail and sunshine to improve the health of the high-street. Retailers must improve efficiency, in many cases reinvent themselves and adapt to the changing retail environment, including last week’s interest rate rise.” 

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