New data published by the British Retail Consortium on Tuesday (15 July) shows some positive news as UK Total retail sales increased by 3.1% year on year in June, against a decline of 0.2% in June 2024.
Food sales increased by 4.1% year on year in June, against a growth of 1.8% in June 2024. Non-food sales increased by 2.2% year on year in June, against a decline of 1.9% in June 2024.
“Retail sales heated up in June, with both food and non-food performing well. The soaring temperatures increased sales of electric fans, while sports and leisure equipment were boosted by both the weather and the start of Wimbledon. Food sales remained strong, though this was in part driven by food inflation, which has risen steadily over the course of the year,” said Helen Dickinson, Chief Executive of the British Retail Consortium.
However, the outlook is not all bright and sunny: retailers are watching the government closely for details of the upcoming business rates reform, said Dickinson.
“If the government includes shops within its new higher rates threshold, then many retailers will be forced to rethink their investment plans. The closure of larger stores would harm the local communities they support, costing jobs and reducing footfall in the area they serve,” she said.
“If the government wants to improve high streets and help local communities, it must ensure that no shop pays more under their new rates reforms.”
Summer heat boosts sales
Commenting on the data, Linda Ellett (UK Head of Consumer, Retail & Leisure, KPMG) noted that home appliances and homeware purchases helped retail sales to grow in June, as new homebuyers and those having a refresh in their current home took advantage of summer promotions both in-store and online.
“Warm weather and the start of the holiday season led to modest monthly growth for clothing sales. But retailers will be hoping that the buying is not yet complete and that the pace picks up further in July and August as suitcases get packed and the sun hopefully keeps shining,” she said.
Concerns about price rises
It’s not all good news, however, as shoppers are still feeling the pinch and the rising cost of food. “Shopper confidence fell back this month but stayed marginally above zero, landing at just one,” said Sarah Bradbury (CEO of IGD).
“Escalating global tension and economic pressures left shoppers feeling uncertain in the year ahead. Notably, the number of shoppers expecting food prices to get much more expensive rose from 14% to 20%, reflecting renewed inflation concerns,” she said.
“Value sales growth continues to be predominantly driven by inflation, with volumes under sustained pressure. However, the arrival of new summer ranges and improved weather presents retailers with opportunities to tap into more consumer occasions, particularly amongst higher-income shoppers who remain focused on quality.”
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