Retail sales rise in June helped by good weather and inflation

Total industry revenues advanced 2% – above the six- and 12-month averages of 1.4% and were partly lifted by inflation, according to the BRC-KPMG Retail Sales Monitor.

Online sales of non-food products climbed 10.1% over the month.

On a three-month basis, food sales climbed 3.6% like-for-like and 4.7% in total. 

Over the same period, non-food sales increased 0.9% on a like-for-like basis and 1.2% per cent in total – the best three-month average since December, and the first above 1% this year.

‘Rosier picture’

BRC chief executive Helen Dickinson said: “The six-month average, buoyed by June’s strong performance, now paints a slightly rosier picture for retail sales.

“But on closer inspection, the year-on-year numbers belie the fact that rising food prices are responsible for the main component of growth and have prompted more cautious spending towards discretionary non-food items.

“Online continues to take the lion’s share of growth, although the contribution from stores increased slightly in June as it seems shoppers headed out with specific purchases in mind rather than just to browse.

“Looking ahead, there’s a question mark over whether this spending momentum will last, as household expenditure is increasingly squeezed by rising inflation and slowing wage growth.

EU negotiations

Dickinson added: “The reality is that retailers’ efforts in absorbing mounting cost pressures into their margins are already being tested, so the Government must have the consumer front of mind as it enters the UK’s trading negotiations with the EU, to avoid any further cost increases to retailers and their customers.”

KPMG head of retail Paul Martin said: “For fashion retailers, the boost in sales could not have come soon enough. Following a challenging year so far, it appears the higher temperatures provided an increased interest in summer collections.

“Whilst the latest figures are definitely more favourable than last month’s, retailers must look at the bigger picture.

“Inflation and household debt are fuelling part of this retail growth, meanwhile the industry is undergoing significant structural changes more broadly.”