July retail sales rise yet fashion experiences bumpy ride

Total retail sales across the UK rose by 2.5 percent year-on-year in July, according to new data from the British Retail Consortium (BRC). While warm weather at the beginning of the month encouraged activity, the eventual return of rain impacted sales, particularly in fashion.

“Fashion sold well early in the month, but deteriorated as weather worsened, while homeware and indoor furniture grew steadily, recovering from the previous year’s decline,” Helen Dickinson, chief executive of the BRC, said in a statement.

Total sales came above the 12-month average growth of 1.9 percent, largely driven by food, for which sales rose 3.9 percent. Non-food sales saw a YoY increase of 3.9 percent, with in-store sales coming out on top, rising 1.9 percent. Online non-food sales saw a more marginal increase of 0.3 percent YoY.

Despite the positive trajectory, there is still a sense of hesitancy among consumers. Linda Ellett, UK head of consumer, retail and leisure at KPMG, said that while many consumers reported feeling confident in their ability to balance monthly household budgets, “big ticket purchases are more considered in the context of rising essential costs and ongoing caution about the economy and labour market”.

Dickinson, in turn, expressed concern over the marginal growth in sales, which she said barely covered the “seven billion pounds in new costs imposed on retailers at the last Budget”. She added: “If the upcoming Autumn Budget sees more taxes levied on retailers’ shoulders many will be forced to make difficult choices about the future of shops and jobs, and ongoing pressure would push prices higher. Ultimately, this means more families struggling, particularly those on lower incomes, reduced consumer spending and a drag on economic growth.”