Heatwave slows retail sales but World Cup boosts online shopping
June’s scorching heat slowed retail sales, but Brits opted to shop from home instead, sending online sales soaring.
Total retail sales in the UK slowed from 3.7 per cent in May to 1.9 per cent in June year on year, in line with this year’s average growth rate, according to the British Retail Consortium (BRC).
Declining visits to physical stores, with sales down 1.1 per cent, drove this slowdown, as stifling temperatures kept Brits away from the high street.
But online non-food sales surged by more than five per cent, accounting for the biggest proportion of total retail sales recorded so far this year.
Electric fans, air con units and paddling pools were among the most popular items in June, as Brits did their best to keep cool.
Shop fridges struggle with heat
Linda Ellet, the UK head of consumer at the consultancy KPMG, said that high temperatures coincided with the World Cup, boosting spending on summer staples.
“Demand for fans and air con units helped drive up home appliance sales, with some retailers struggling to restock fast enough, while the men’s football World Cup also brought a boost for home electrical sales and food and drink,” she said.
But the sales blow to physical retailers came as shop owners struggled to keep up with the heat.
At its annual general meeting last week, M&S’s chief executive told shareholders that his company is investing in fridges that can handle continued high heat.
“There is no doubt we were struggling in the nine days of extreme heat,” Stuart Machin said.
Retailers urge business rates reform
“These pressures come on top of rising business rates, higher employment taxes and ongoing global uncertainty, all of which are squeezing retailers’ ability to invest, create jobs and keep prices down,” BRC chief executive Helen Dickinson said.
The trade body’s boss called on incoming Prime Minister Andy Burnham to implement a “more joined-up approach” to taxing the high street.
The Makerfield MP has pledged to slash business rates for retailers and hospitality firms, and instead hike levies on out-of-town warehouses.
On Tuesday, trade bodies, including UKHospitality and the British Independent Retailers Association, ramped up calls for the government to make the business rates system fairer.
The newly formed Real Rates Reform Alliance claims that businesses are hiking costs for consumers, slashing investment, and cutting staff in direct response to soaring tax bills.