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Flaming June for online says BRC-KPMG Sales Monitor

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While store sales growth only edged forward by 1.5% during June, web and catalogue sales clocked up a healthy 11.5% increase on June 2010, according to the latest BRC-KPMG Sales Monitor. This is encouraging news for the ecommerce sector, following slightly slower year-on-year sales growth during April and May. Last year’s June growth figure for online, mail and phone order sales was 17.3%.

In stores, early sales have helped the non-food stores sector see a modest improvement, while food sales growth was slower. Consumer caution continued to hit big-ticket housing-related purchases, and a spate of store closures has exacerbated the mood of gloom on the high street. Last June saw better performances on the high street thanks to the World Cup and a June heat wave in 2010.

Stephen Robertson, director general, British Retail Consortium, said: “Given June’s spate of shop closure announcements and weak company results, these figures are not as bad as they could have been but it shows just how tough times are when total sales growth of 1.5% is regarded as not that bad. And remember, the higher VAT rate is making the year-on-year comparison look better than it really is, while retailers are coping with higher costs because of increased utility bills, rates and the burden of regulation.”

He warned that sales continue to be under huge pressure from the squeeze on disposable incomes produced by rising inflation and low wage growth. “Underlying conditions are still tough but being masked by a minor revival in non-food sales driven by price cuts and clearance events starting earlier this year.”

Helen Dickinson, head of retail, KPMG, said: “Across non-food, it was a better month than May. But we are certainly not out of the woods yet, as highlighted very starkly with the demise of a number of well-known brands during the course of June. Other than in food, many retailers continue to seek to reduce capacity through store closures. However, it was a welcome relief to know that May was not indicative of a new norm.”

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