LONDON, 2014-8-12 — /EPR Retail News/ — UK retail sales were down 0.3% on a like-for-like basis from July 2013, when they had increased 2.2% on the preceding year. On a total basis, sales were up 1.3%, against a 3.9% rise in July 2013. The three-month average total sales growth, 1.3%, is below the twelve-month average of 2.3%.
Furniture was the best performing category, reporting its highest growth since January, excluding Easter distortions. Meanwhile, Food was the worst performing category and experienced its deepest three-month average decline since our records began in December 2008.
Over the last three months, Food showed a decline of 1.4%, in contrast with the growth of 0.4% experienced over the last twelve months. Non-Food reported growth of 3.4% over the three months to July 2014, in line with its twelve-month average of 3.8%.
Online sales of non-food products in the UK grew 14.9% in July versus a year earlier. The Non-Food online penetration rate was 16.7% in July, 1.4 percentage point higher than in July 2013.
Helen Dickinson, Director General, British Retail Consortium, said: “This July we have achieved overall growth of 1.3 per cent year on year, which at first glance compares unfavourably with the 2.3 per cent long-term rate over the last twelve months. However, July last year was a tough month to beat because consumers had really responded well to high profile exciting sporting events and of course, the birth of the royal baby. Food experienced its deepest three-month average decline since at least December 2008, explained partly by the continuing keen price competition between supermarkets, which consumers are taking full advantage of, and record low food inflation.
“The home categories showed a pick up this month after performing less well in June; furniture reported its highest growth since January excluding Easter distortions and home accessories and house textiles (especially lightweight bedding) all did well. Understandably, outdoor products sold well as did overall toys and baby equipment.
“Non-food online sales continued to show strong growth, the third highest this year, driven notably by furniture, kitchen appliances, gaming and toys.”
David McCorquodale, Head of Retail, KPMG, said: “The tale of two sectors continues with polarisation between food and non-food. While non-food retailers had a stellar month, surpassing even last year’s record sales performance, the grocers saw sales tumble in value as their competitive pricing continued.
“Fashion retailers are enjoying a better summer, even against tough comparatives that included a heatwave, royal baby and a British Wimbledon champion, and many have avoided the price cutting sprees seen last year. There was even a bounce back in furniture and household spend following a softening in June.
“The grocers’ figures continue to make for gloomy reading for the sector. The impact of their prolonged discounting campaigns may be good news for consumers, but must be being felt deeply by the retailers given like for like sales have fallen in value every month for the last 12 months, save for April when Easter helped sales. The headache for the grocer investor is the tonic for the consumer: it’s likely these price wars are here to stay for the foreseeable future.”
British Retail Consortium, 21 Dartmouth Street, Westminster, London, SW1H 9BP. 020 7854 8900. info@brc.org.uk.