Grocers’ price wars weigh on July retail sales

 
Kasmira Jefford
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Retail sales continued their good run in July while grocers felt the heat
RETAIL sales slowed in July from the previous month’s two-year high as the fierce supermarket price wars continued to weigh on the sector.

Figures from the British Retail Consortium (BRC) and KPMG this morning show that like-for-like UK retail sales were up 1.2 per cent in July compared with the same month last year, when they fell by 0.3 per cent.

Total sales were up 2.2 per cent, a slight slowdown on the 2.9 per cent growth seen in June but ahead of last July’s 1.3 per cent rise. Total food sales fell for the first time this year, if distortions due to the timing of Easter are stripped out of the data.

David McCorquodale, head of retail at KPMG, said: “Retail sales remained positive in July as improved consumer confidence is slowly winding its way to the tills. Grocers continue to feel the heat with like-for-like sales down 1.6 per cent in the last three months, but this is an improvement from the doldrums of last year.”

Joanne Denney-Finch, chief executive of food industry body IGD, said that the cold weather also had its part to play in the weak performance. “Food and drink sales are particularly influenced by the weather at this time of year. July began with a heatwave and strong food sales but the rest of the month was colder and wetter than average and July’s overall performance disappointed after a run of more encouraging months,” she added.

Furniture and home accessories were among the best performing categories thanks to the housing market recovery, with consumers taking advantage of end of season sales to deck out their homes.

“As the labour market continues to improve and real wages show strong growth it’s no surprise our extra disposable income seems to be being spent on more discretionary purchases. BRC director general,” the BRC’s Helen Dickinson added.

The three month average showed food sales were up 0.1 per cent from May through to July while non-food sales grew 3.7 per cent over the same period.