Consumer spending grew at its slowest rate since 2009 (when the British economy was in recession) in the three months leading up to the EU referendum, but retailers attributed this to bad weather as opposed to jitters about the outcome of the vote.
According to the British Retail Consortium and KPMG’s Retail Sales Monitor, the monthly survey of the high street and online sales, sales in the second quarter were up just 0.5% on the first quarter and up 1.2% on the previous year.
This, said the BRC, was the weakest growth performance it had seen since May 2009 when the British economy was contracting. During the month of June sales were up 0.2% on June 2015 but on a like-for-like basis (this takes into account increased retail capacity over the past 12 months) they were in fact down 0.5%.
KPMG’s David McCorquodale said fashion had been a particularly poor performer due to the consistently heavy rain. “With May sunshine a distant memory, however, summer wardrobes remained bare as sales of women’s fashion and footwear plummeted following one of the wettest and dullest starts to a UK summer since records began.”
The BRC and KPMG figures back up the recent findings from Kantar Worldpanel which showed fashion sales overall had contracted in the year to 5 June by 0.1%, having grown by 20% over the course of the previous 10 years.
A number of retailers were forced to bring forward their summer sales during June with John Lewis, Marks & Spencer and ASOS all recently pointing out they had been forced to cut prices sooner in the season than previously.
Industry watchers say it is too soon to predict the long-term impact the Brexit vote will have on consumer confidence moving forward but the earlier than expected appointment of a new prime minister – Theresa May is due to be sworn in today – has had a positive effect on the financial markets. FTSE 100 rallied 92.22 points, or 1.4%, on the back of the news that Andrea Leadsom had dropped out of the leadership race while the pounded edged up against the dollar. Analysts suggest that May, who has an easier relationship with the EU than the largely unknown (to EU leaders anyway) pro-Leave Leadsom, should be able to strike a better Brexit deal for Britain.