Overall retail sales were up 1.2% on a like-for-like basis in June, according to the latest figures from the British Retail Consortium (BRC) and KPMG, with fashion sales gaining a much-needed boost as warmer weather arrived.
On a total basis, sales rose 2.0% in June, against a growth of 0.2% in June 2016, which is below the six-month and 12-month averages, both at 1.4%.
Over the past three months non-food sales were up 0.9% on a like-for-like basis and up 1.2% per cent on a total basis, which is above the 12-month total average growth of 0.6%. According to the BRC-KPMG Retail Sales Monitor, this is the best three-month average since December, and the first above 1% of the year so far.
Online sales of non-food products grew 10.1% in June, compared to 9% a year earlier. Over the three-months to June, online sales of non-food products grew 8.4% while in-store sales declined 0.7% on a total basis and 1.2% on a like-for-like basis, which is a better performance than the like-for-like 12-month average decline of 2.0%.
KPMG head of retail Paul Martin said while fashion had fared well in June all retailers should remain cautious in their outlook. “For fashion retailers the boost in sales could not have come soon enough. Following a challenging year so far, it appears the higher temperatures thankfully provided an increased interest in summer collections. Elsewhere, the sun also shone on health and beauty sales too, with the category continuing to be a top performer,” he said.
“Whilst the latest figures are definitely more favourable than last month’s, retailers must look at the bigger picture. Inflation and household debt are fuelling part of this retail growth, meanwhile the industry is undergoing significant structural changes more broadly. The retailers succeeding are those embracing change,” Martin added.
BRC CEO Helen Dickinson also cautioned against too much optimism given the increased pressure on retailers’ costs and household incomes. “Looking ahead, there’s a question mark over whether this spending momentum will last, as household expenditure is increasingly squeezed from rising inflation and slowing wage growth. The reality is that retailers’ efforts in absorbing mounting cost pressures into their margins are already being tested, so the Government must have the consumer front of mind as it enters the UK’s trading negotiations with the EU, to avoid any further cost increases to retailers and their customers,” she said.