More rain and less spending for July
Published: 10 September, 2007
UK retail sales were up by 1.2 per cent on a like-for-like basis, compared with July 2006, while the three-month trend rate of growth fell to 2.1 per cent from 2.5 per cent in June, for like-for-like sales, and to 4.1 per cent from 4.6 per cent for total sales, reflecting the continuing growth of retail space.
As in June, sales patterns were distorted by exceptional weather. Food sales fell, and the torrential rain continued to hit clothing and footwear, DIY and gardening, but benefited department stores and out-of-town centres.
Consumer spending is being squeezed by interest rates. Plans to buy big-ticket items have been scaled down and heavy discounts are often needed. Kevin Hawkins, director general, BRC said: "The combination of a tightening squeeze on consumer spending and heavy rainfall reduced like-for-like sales growth to a level not seen since last November. Given these conditions, the Bank of England should now wait and see what happens over the next few months before doing anything further with interest rates."
According to Joscelyne Hynard, senior analyst of the Business Information Team, BRC, food and drink sales in July were lower than a year ago, for the first time since July 2000. The decline stemmed from last July's strong comparatives with the heatwave and the World Cup against torrential rain and cold winds this July. Heavy discounts were needed to clear summer clothes such as shorts, tops and swimwear, but there were welcome gains for jeans, light knitwear and waterproofs.
After two strong months, toiletries and cosmetics sales grew more slowly, albeit against a strong July 2006. Cosmetics and fragrances did well, especially premium and contemporary ranges. Suncare, deodorants, bath and body suffered in the poor weather.
Home entertainments and books performed well. The new Harry Potter book gave a big boost to book sales. Computer games did really well, with Nintendo Wii and DS Lite very popular. Outdoor toys and hobbies struggled, but there were some good clearance sales with heavy discounts.
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=== BRC/KPMG Retail sales monitor UK - July 2007 ===
Year-on-year like-for-like (July 2007 v July 2006) UP +1.2%
Year-on-year total sales (July 2007 v July 2006) UP +3.1%
