British Retail Consortium chief executive Helen Dickinson said: "Sales growth slowed in July from June. That said, given the strong performance of the same month the previous year, the figures are fairly solid. Closer inspection of the headlines however unveils some familiar challenges. The month’s growth was underpinned by food sales alone, while non-food sales relapsed into negative territory as the competition heats up over a shrinking pool of discretionary consumer spending power."
"Despite the gloomy picture for non-food overall, there were some success stories. The Homewares category for instance, which lost out in the previous month to summer wardrobe purchases, moved to the top of the performance rankings. Meanwhile, a number of clothing retailers benefitted from some early interest in their newly launched autumn- winter ranges."
"Against a backdrop of increased consumer borrowing and shrinking real wages, we can expect food to continue making the running for sales growth for the time-being, although driven more by price than volume, with non-food continuing to struggle. The tough outlook for customers means that ensuring that prices remain low and choice and confidence remains high lies at the heart of what a fair Brexit for consumers looks like. So ensuring tariff-free trade with the EU must be the focus for Government as it resumes negotiations at the end of this month."
KPMG retail head Paul Martin said: "From afar, retail performance appears to have been stable in July, with total sales growing by 1.4% and both online and on the high street sales registering growth overall. Looking at the figures in more detail though, the food sector continues to perform strongly whilst non-food sales struggle. Food price inflation continues to play a role albeit this pressure is reportedly easing, however it’s also important to note that a major driver behind increased consumption is rising household debt.
"Bucking the overall trend in non-food, children’s footwear seems to have been a popular purchase, no doubt encouraged by the start of summer holidays. Elsewhere, the rainy month turned attention indoors, with furniture and home accessory sales benefiting. For online retailers, everyone appeared to be a winner, but once again health and beauty was a strong performer in the month.
"Interestingly, July retail sales diverge from the latest consumer confidence figures, which noted a downturn in consumer sentiment. This divide suggests that UK shopping patterns remain mixed, although with demand continuing to be weak, retailers would be wise to remain cautious."
On a total basis, sales rose 1.4% in July, against a growth of 1.9% in July 2016. This month’s growth is in line with the 12-month average.
Over the three months to June, Food sales increased 2.3% on a like-for-like basis and 3.4% on a total basis. This is weaker growth against the 3-month average to June 2017 but stronger against the same three months to July 2016.
Over the three-months to July, Non-Food retail sales in the UK decreased by 0.7% on a like-for-like basis and by 0.4% on a total basis. This is below the 12-month total average growth of 0.4%.
Online sales of Non-Food products grew 8.3% in July, compared to 11.2% a year earlier. Over the three-months to July, Online sales of Non-Food products grew 7.8% while the 12-month average stands at 8.4%.
Over the three months to July 2017, In-store sales declined 2.6% on a Total basis and 3.0% on a like-for-like basis.
Barclaycard found consumer spending grew by 3.5 per cent year-on-year in July, the highest figure since April, as the cost of everyday groceries continued to push up spending in supermarkets. Shoppers reported another month of ‘feeling the squeeze’ of higher inflation and subdued wage growth, dampening confidence in the wider economy.
Data from Barclaycard, which sees nearly half of the nation’s credit and debit card transactions, also shows, however, that consumers received some respite from a continued drop in petrol prices, which have fallen from an average of 120p per litre at the start of the year to 113p last month. As a result, expenditure on the forecourt increased just 2.5 per cent in July, the lowest figure since August 2016.
Against this backdrop, consumers carefully budgeted for their priorities. This included the ‘experience economy’, or spending on leisure time with friends and family, as entertainment rose 12.5 per cent.
Expenditure on cinemas and tickets grew 24.3 per cent as Brits flocked to see new blockbusters such as Dunkirk, Baby Driver and Despicable Me 3, and snapped up tickets for the 2018 tours of Ed Sheeran and The Killers. In addition, restaurants (13.3 per cent) and pubs (11.8 per cent) remained robust as Brits enjoyed the sunny summer weather.
One category that fell down the priority list was clothing, which contracted 0.3 per cent year-on-year – in contrast with a particularly strong June (5.7 per cent). Women’s clothing suffered in particular, down 4.9 per cent on July 2016.
As consumers increasingly felt the pressure from months of higher grocery prices and re-allocated their budget to make ends meet, consumer sentiment also weakened. The proportion of those confident in the UK economy fell to 28 per cent in July, the lowest figure recorded since Barclaycard began its research in 2014, and a continuation of the downward trajectory that started in March.
Monthly retail sales % change:
- January 0.1%
- February 0.4%
- March -0.2%
- April 6.3%
- May 0.2%
- June 2.0%
- July 1.4%