UK retail sales were down 0.8% on a like-for-like basis from June 2013, when they had increased 1.4% on the preceding year, according to the latest BRC-KPMG UK Retail Sales Monitor. Excluding Easter distortions, this is the lowest total growth recorded since May 2011. However, the three-month average is in line with the 12-month average of 2.5%.
GfK’s Climate for Major Purchase consumer confidence index edged up again from -3 in May to -2 in June. However, Furniture sales slowed a little, perhaps impacted by the later start of some summer clearances. Retailers still reported good demand for bedroom pieces.
After strong sales in May, Home Accessories experienced a slight decline in June and experienced the lowest growth of all Home categories. Father’s Day gifts and lighting were the only highlights.
June’s growth in House Textiles was slower than in May but was still driven by demand for light duvets and bedding.
Helen Dickinson, director general, British Retail Consortium, comments: “Consumers continue to benefit from competitive pricing, which may be the cause of softer like-for-like sales in June. For retailers, it’s a bit of a mixed picture, with food sales down and non-food sales up but at a slower rate than in June. Are consumers pausing for a breath after the recent rush for revamping their homes? Could it be that they are feeling a touch more confident and have bought into fashion at full price, which in turn has encouraged some retailers to delay their summer sales? In this case, retailers may find that their margins are less affected than figures would suggest.
"Even sales of home accessories and furniture flatlined, which is surprising given the UK is reportedly in the midst of a housing boom"
“On the other hand, the total value of overall food sales is still in decline but the lower pricing policies we have witnessed are good news for consumers who are set to continue to benefit from keen bargains in their shopping baskets. The recovery is still on track, however, we are detecting differences in attitudes from customers, perhaps led by the competitive environment for food prices. Consumers are delighted to be saving on their food bills, but are prepared to spend a little bit more on discretionary items.”
David McCorquodale, head of retail, KPMG, adds: ”Concern over a potential rise in interest rates is having a dampening effect on retail sales. June saw the brakes applied to spending as shoppers put purchases of big ticket items on hold whilst they waited to see if the Bank of England would take action on interest rates. Even sales of home accessories and furniture flatlined, which is surprising given the UK is reportedly in the midst of a housing boom."