‘Too early’ to detect Brexit effect as online sales growth slows in June: BRC

Online sales growth slowed to single digits in June, said the British Retail Consortium – though it did not as yet see a confirmed Brexit effect on spending. Ecommerce non-food sales growth of 9% outpaced the performance of stores, leading the organisation to say that as shoppers stop seeing a difference between the channels in which they buy, they will need a reason to go to shops.

Total retail sales grew by 0.2% in June, while like-for-like sales – which strip out the effect of store openings and closures – fell by 0.5%. A fifth (20.6%) of retail sales took place online during the month. Average three-month figures showed that while online contributed 2.3 percentage points to non-food growth, the contribution of stores was -1.9 percentage points.

“While online clearly remains the primary driver of sales growth for UK retailers, shoppers are no longer thinking in channels and are more and more often using both digital and physical stores as part of their customer journey from initial consideration to the actual transaction,” said BRC chief executive Helen Dickinson. “Today’s figures re-emphasise the need for physical stores to be a destination for retail experiences rather than specifically and solely for the sales transaction itself.”

She said online sales grew across all categories except footwear as they increased their share of total non-food sales.

David McCorquodale, head of retail at KPMG , said gloomy weather meant summer fashion sales “resembled tumbleweed on a catwalk”. However, he said, electricals had sold well as Euro 2016 watchers invested in both televisions and high-tech mobile phones.

Dickinson said it was too early as yet to say whether there had been a ‘Brexit effect’ on retail sales.

“Britain’s retailers remain open for business,” she said. “The EU referendum vote has not changed their relentless pursuit of delivering for customers day in, day out or their investment in meeting the needs of fundamental changes in the way people shop, driven by digital and technology. Despite the fall in the pound, the time it takes for any input price increases to translate into higher shop prices will depend on a combination of factors including further changes in the pound, commodity prices and the challenge for retailers to move pricing given the intensity of competition. So, there won’t be any instant shocks as any changes would take time to feed through.”