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UK consumer spending in the month of July fell to a record low despite the good weather, according to the latest statistics from the British Retail Consortium (BRC) and KPMG.
On a total basis, sales increased by 0.3% in July, against an increase of 1.6% the previous year, it is also the lowest figure recorded for the month since records began in 1995. The results also precede the “worst” June on record.
The BRC also revealed that UK retail sales increased by 0.1% on a like-for-like basis from July 2018. This is above the 3-month and 12-month averages of -1.5% and -0.2% respectively.
Over the three months to July, In-store sales of non-food items declined 4.1% on a total basis and 4.0% on a Like-for-like basis. This was found to be below the 12-month total average decline of 2.6%.
Commenting on the figures Helen Dickinson, chief executive of the BRC said that the combination of “slow real wage growth and Brexit uncertainty” has left consumer spending “languishing”.
She said: “Whereas last year’s glorious sunshine and World Cup Finals led to strong consumer demand over the summer, this year has been weak in comparison, with both June and July showing the lowest sales on record for their respective months. And it is not just high streets that are suffering, with Non-food online growth also one percentage point below the 12-month average.
“The challenging retail environment is taking its toll on many high street brands who must contend with rising import costs, a multitude of public policy costs, and ever higher business rates. A coherent strategy for retail is needed. The Government should freeze future business rates rises and fix the appeals system before embarking on a wholesale reform of this broken tax system.”
Paul Martin, UK head of retail at KPMG, added that despite record temperatures “it is clear that most players need more than sunshine to get back on their feet”.
He said: “Given the weather it’s unsurprising that shoppers reconsidered their wardrobe, but it was online retailers who benefited most once again. Online non-food sales overall actually grew by only 3.7%, which is considerably lower than previous years. Meanwhile, another category which has historically benefitted from the good weather is grocery, but even here sales are lacklustre, which is a cause for concern.”
