Shoppers defy signs of Brexit gloom as summer sales increase
Discounts and summer sunshine kept shoppers spending last month despite fears of a post-referendum slowdown according to the latest British Retail Consortium(BRC)-KPMG sales monitor.
The survey showed total retail sales were up 1.9 per cent in July compared with a year ago, while like-for-like sales rose 1.1 per cent over the period.
Retailers beat expectations and boosted sales, encouraged by a heavy month of promotions, while warmer weather in July saw shoppers splashing out on picnics and barbecues, helping food sales rise 0.8 per cent between May and July. The rise in sales came in the face of reports that suggested that consumer activity was due to slow down as a result of the Brexit vote.
Richard Peberdy, transaction services partner at KPMG in the Midlands, said: “The sun shone down on retail fortunes in July with total sales increasing 1.9 per cent versus 2015. Warmer weather helped blow away some of the post-referendum blues, boosting the UK feel good factor and giving consumers a sense that ‘life goes on’ following the initial shock of the Brexit vote.
“The July heatwave put picnics and barbeques high on the agenda lifting sales of food and drink back into the black. Meanwhile, fashion sales improved markedly versus June as well-timed promotions, holiday preparations and some sunshine prompted consumers to supplement their summer wardrobes. Sales of jewellery and watches also improved as international consumers took advantage of the weaker sterling to splash out on more expensive purchases.
“This first full month of retail sales figures post-vote suggests that UK shopping patterns haven’t changed versus previous years. For retailers, plans to improve productivity remain top of mind to guard against recent increases to their cost base as well as making sure they can weather what are likely to be more uncertain times ahead.”
Helen Dickinson OBE, chief executive of the BRC, added: “This month’s solid sales figures may come as a shock to some given the slew of early indicators suggesting that consumer activity was slowing in the wake of the referendum result. However, little has materially changed for most UK households in the wake of June 23, so it is not surprising to us that sales are simply responding to their normal underlying drivers. A heavy month of promotions proved very successful in appealing to bargain-hungry shoppers, boosting sales growth to 1.9 per cent, ahead of the 12- month average of 1.2 per cent.
“The big question for retailers is whether that success can be carried forward into full price sales. Whilst retailers continue to monitor the situation in the wake of Brexit, responding to rapid and complex change in consumer behaviour in the midst of a highly competitive market remains the substantive challenge. The industry is in the process of productivity-enhancing transformation, but Government needs to play its part to ensure that change is not suffocated by increasing costs.”
