UK's retail sales show modest growth in July 2024

UK total retail sales saw a modest increase of 0.5 per cent year-on-year (YoY) in July, compared to a 1.5 per cent growth in July 2023, according to the British Retail Consortium (BRC). This figure is above the three-month average growth of 0.3 per cent but falls short of the 12-month average growth of 1.4 per cent.

“Retail sales returned to growth. The late arrival of British sunshine led to a better month for summer clothing as shoppers prepared for days out with friends and holidays away. Now that election uncertainty is over and government is rolling out plans to kickstart economic growth, retailers are planning their own investment strategies. Many will be looking to the Autumn Budget, keen to see an end to business rates rises under the new Labour government. They will also be looking for any details of the reform of the whole business rates system, promised in Labour’s manifesto,” said Helen Dickinson, chief executive of the British Retail Consortium.

Non-food sales experienced a decline of 1.7 per cent YoY over the three months leading up to July, compared to a 0.5 per cent decline in the same period last year. Despite this decrease, it is slightly better than the 12-month average decline of 1.8 per cent. For the month of July, non-food sales continued to decline on a YoY basis, as per BRC.

In-store non-food sales saw a significant decrease of 2.7 per cent YoY over the three months to July, a sharp contrast to the 1.2 per cent growth observed in July 2023. This decline is also below the 12-month average decline of 1.7 per cent.

Online non-food sales, however, showed a slight increase of 0.3 per cent YoY in July, a notable improvement from the average decline of 6.9 per cent in July 2023. This growth aligns with the three-month average increase of 0.3 per cent and surpasses the 12-month average decline of 2.0 per cent.

The online penetration rate, representing the proportion of non-food items purchased online, rose to 35.5 per cent in July from 34.9 per cent in July 2023. Nonetheless, this figure remains below the 12-month average of 36.3 per cent.

Linda Ellett, UK head of consumer, retail, and leisure, KPMG, said: “Spending levels continue to be governed by whether households have been able to absorb the likes of mortgage and rent increases, or had to limit their spend elsewhere as a consequence. Also, while some sectors are seeing wage growth, others are cutting posts, leaving some consumers mindful that they may need to fall back on savings if they find themselves out of work.

“ONS data for the first quarter of 2024 shows a growing average percentage of household income being put into savings.  But it's looking increasingly likely that the retail sector will see a gradual drip effect from those choosing to spend some, rather than the spending taps suddenly being turned on full.”

Fibre2Fashion News Desk (DP)