Summer sun shines on UK retail as sales rise

Helen Cahill
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The arrival of some summer sun buoyed retail sales last month in welcome turnaround for the sector.

Like-for-like retail sales climbed 1.2 per cent in June, according to figures from the British Retail Consortium (BRC) and KPMG. In the same month last year, sales fell 0.5 per cent.

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In the three months to June, total non-food sales grew 1.2 per cent, which was the best three month average since December.

It was the first time this year that the BRC recorded three-month sales growth above one per cent in the non-food sector.

Helen Dickinson, BRC chief executive, said the figures represented a "reversal in fortunes" for non-food retailers.

Hot weather boosted spending on leisure activities, summer clothes, and beauty products, she said.

Read more: Shop price inflation set to hit consumers as retailers pass on costs

Food sales climbed 3.6 per cent over the three months to June on a like-for-like basis. Total sales grew 4.6 per cent.

Paul Martin, UK head of retail at KPMG, said: "After a challenging month in May, retail performance in June appears to have rebounded both online and on the high street. However, whilst the sunshine may have prevailed this month, retailers would be wise to remain cautious."

He said that the retail sector was undergoing significant structural change and that only those willing to embrace the changes were likely to succeed.

With inflation rising, the outlook for the retail sector is uncertain. Shop prices have been falling since May 2013, but they are expected to start rising in the coming months as retailers' hedging contracts come to an end.

Food prices have already been rising for some time, and analysts expect prices in this sector in the industry to stabilise soon.

But, non-food retailers have so far managed to keep prices down and absorb costs.

It is thought they will soon start passing on inflationary pressures to consumers, however.

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