Department store sales inch up after six months of decline

The quantity of goods bought at department stores rose 1.6% in July, according to the Office for National Statistics (ONS) survey for July. The increase followed six consecutive months of decline.

The ONS observed: “Department stores have been declining from January 2019, partly because of store closures but July’s growth bucks this trend.

“Department store retailers have suggested that new clothes lines in addition to extra promotions have helped with sales for this month.”

The sales increase may not indicate improved fortunes for department stores just yet, however. The ONS cautioned that “monthly estimates can be more volatile” than longer-term data.

Overall retail sales excusing fuel advanced 2.9% year on year by volume over the month and were up 3.4% by value. However, food stores suffered a 0.5% decline in volume.

By value, the quantity of goods bought was ahead 0.2% by volume and 0.1% by value.

Online sales accounted for 19.9% of total retail sales in July – up 12.7% year on year. Retailers without stores accounted for the highest proportion of the growth as their sales climbed 9.5% month on month and 17.5% year on year.

Department stores did not share in the online growth – their online sales slipped 1.3% year on year, although that was against growth of 34.4% last year.

On a three-month basis, total retail sales were up 0.5% by volume compared to the previous three months but food stores were down.

Sales were up 0.6% by value on the same comparative periods.

Karen Johnson, head of retail and wholesale at Barclays Corporate Banking, said: ”Retailers won’t be getting carried away by these figures… They will continue to be mindful of the looming Brexit threat and potential impact on their international supply chains, with possible cost increases and price rises on the horizon. Margins are already under significant pressure, so we need to be careful not to focus too heavily on headline growth numbers.”