Home Intelligence Intelligence Economics Retail sale improvement should see more material available

Retail sale improvement should see more material available

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pic: Tesco PLC https://www.flickr.com/photos/tescomedia/32207319435/

More recyclable material should be in the system following a decent month for retail sales in June.

Good weather helped to encourage shoppers, and this should continue in July with the added benefit of the World Cup leading to more purchases at shops too.

In June, UK retail sales increased by 1.1% on a like-for-like basis from June 2017, when they had improved by 1.2% on the preceding year.

On a total basis, sales increased by 2.3% in June, against an increase of 2.0% in June 2017. This is above the 3-month and 12-month averages of 1.2% and 1.5% respectively.

Over the three months to June, in-store sales of non-food items declined by 1.4% on total basis and 2.7% on a like-for-like basis. This is an improvement over the 12-month total average decline of 2.4%.

In the three months to June, food sales increased 0.3% on a like-for-like basis and 1.7% on a total basis. This is below the 12-month average growth of 3.7% but includes April, which was negatively distorted by Easter.

Online sales of non-food products grew 8.5% in June, against a growth of 10.1% in June 2017. This is below the 3-month average of 9.0%, but above the 12-month average of 7.9%.

British Retail Consortium chief executive Helen Dickinson said: “Beer, barbeques and big TVs lifted June’s sales as warm weather and World Cup fever gripped the nation. However, with consumers engrossed in the agony and ecstasy of each match, spending on many other items fell. In the end, June scored solid, but not sensational, sales.

“The reality is that sales don’t grow on the feel-good factor alone. With household incomes still barely growing faster than inflation, conditions for consumers and retailers remain extremely tough. And things could get tougher: once the euphoria of sporting success subsides, without a deal on Brexit, shoppers face the prospect of significant price increases and shortages of everyday goods. Even if England do go all the way, households may have little to celebrate come next April.”

KPMG head of retail Paul Martin said: After May’s positive retail performance, June’s results turned out to be less buoyant than hoped for. Sales growth remained in positive territory for the second month running at 2.3%, but as the recent financials of key players’ highlights, sales growth and profitability don’t always go hand-in-hand.

“Grocers benefited from the brighter weather and of course the World Cup, with barbeques and picnics firmly on the menu, and the weather and holiday season are also likely to be behind the uptick in online fashion sales too. But with so much attention outdoors, other household categories didn’t fare exceptionally well.

“The summer sunshine, Wimbledon and the on-going World Cup provide a strong foundation for growth in July, but retailers need to ensure that sales translate into profit. With the structural changes the sector is experiencing, as well as increased costs, this is becoming increasingly difficult to achieve.”

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