BRITAIN’S ailing retail industry showed some signs of life in July, recording a 0.6 per cent rise in like-for-like sales compared to the same time last year.
While total sales were up 2.5 per cent for July, the three-monthly trend of like-for-like sales remained 0.6 per cent down, with the British Retail Consortium (BRC) warning that “conditions remain very difficult for retailers”.
“When you take into consideration inflation and January’s increase in VAT, 2.5 per cent growth effectively means people are buying fewer goods,” said the BRC’s Stephen Robertson this morning.
However, across the country as a whole there was good news for shops in the BRC’s latest figures, released this morning. The data came in far more upbeat than a recent survey by the Confederation of British Industry (CBI), which had pointed to a 13-month low in retail sales.
Yet growth in food sales picked up in July, after a slump in June, the BRC said. Earlier in the summer food sales had spiked, as Britons treated themselves during the hot weather and extra bank holidays. Overall, the last three months have shown an annualised increase of 0.9 per cent in food sales.
“Clothing and footwear picked up after a tough June, helped by clearance sales,” the report added.
“The downside may have been limited by squeezed consumers looking to take advantage of the summer clearance sales,” commented Howard Archer of IHS Global Insight.
“The likelihood is that consumers will be very cautious in their spending over the coming months as their purchasing power remains under severe pressure from high inflation, muted wage growth and tighter fiscal policy.”
The current turmoil in financial markets could also hit already-weak consumer confidence, Archer added.
Growth in non-food and non-store – which include internet and mail order purchases – slowed in July, after clearances sales had boosted figures for June.
Sales were 9.6 per cent higher than a year ago, compared with 11.5 per cent in June and 11.3 per cent in July 2010.