Industry

Online sales growth more restrained in July: BRC

Ecommerce sales grew by more than 8% in July compared to the same month last year, new figures from the British Retail Consortium suggest. But they were markedly less buoyant than June when hot weather saw shoppers buying.

Online sales of non-food products grew by 8.3% during the month, according to the BRC–KPMG Retail Sales Monitor for July 2017. A year earlier they had grown by 11.2%. And in June 2017 they grew by 10.2%.

At the same time, overall retail sales, which mostly take place in shops, grew by 0.9%, on a like-for-like basis, on last year, though this was less than the 1.1% growth recorded in July 2016 – and the 1.2% recorded in June 2017. Total July sales were 1.4% ahead.

Paul Martin, UK head of retail at KPMG [IRDX VKPM], said: “From afar, retail performance appears to have been stable in July, with total sales growing by 1.4% and both online and on the high street sales registering growth overall. Looking at the figures in more detail though, the food sector continues to perform strongly whilst non-food sales struggle. Food price inflation continues to play a role albeit this pressure is reportedly easing, however it’s also important to note that a major driver behind increased consumption is rising household debt.

“Bucking the overall trend in non-food, children’s footwear seems to have been a popular purchase, no doubt encouraged by the start of summer holidays. Elsewhere, the rainy month turned attention indoors, with furniture and home accessory sales benefiting. For online retailers, everyone appeared to be a winner, but once again health and beauty was a strong performer in the month.

“Interestingly, July retail sales diverge from the latest consumer confidence figures, which noted a downturn in consumer sentiment. This divide suggests that UK shopping patterns remain mixed, although with demand continuing to be weak, retailers would be wise to remain cautious.”

Over the three months to July, online sales of non-food products grew by 7.8% while the 12-month average stood at 8.4%.
In-store sales declined in the same period by 2.6% in total and by 3%, like-for-like.

Helen Dickinson, chief executive of the British Retail Consortium [IRDX VBRC], said the retail sales figures were “fairly solid”. She added: “Closer inspection of the headlines however unveils some familiar challenges. The month’s growth was underpinned by food sales alone, while non-food sales relapsed into negative territory as the competition heats up over a shrinking pool of discretionary consumer spending power.

“Despite the gloomy picture for non-food overall, there were some success stories. The homewares category for instance, which lost out in the previous month to summer wardrobe purchases, moved to the top of the performance rankings. Meanwhile, a number of clothing retailers benefitted from some early interest in their newly launched autumn- winter ranges.

“Against a backdrop of increased consumer borrowing and shrinking real wages, we can expect food to continue making the running for sales growth for the time-being, although driven more by price than volume, with non-food continuing to struggle. The tough outlook for customers means that ensuring that prices remain low and choice and confidence remains high lies at the heart of what a fair Brexit for consumers looks like. So ensuring tariff-free trade with the EU must be the focus for Government as it resumes negotiations at the end of this month.”

Mentioned in this piece…

KPMG

KPMG

IRDX: VKPM

KPMG in the UK has over 10,000 partners and staff working in 22 offices and is part of a strong global network of member firms. Our vision is simple – to turn knowledge into value for the benefit of our clients, people and our capital markets. Our innovative spirit inspires what we do and how we do it, providing valuable benefits for clients, employees and stakeholders. Constantly striving to be better lies at the heart of what makes us different. (more…)

British Retail Consortium

British Retail Consortium

IRDX: VBRC

The British Retail Consortium (BRC) is the lead trade association representing the whole range of retailers, from the large multiples and department stores through to independents, selling a wide selection of products through centre of town, out of town, rural and virtual stores. (more…)

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