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Consumer spending left languishing

Consumer spending left languishing

BRC-KPMG Retail Sales Monitor July 2019.

Paul Martin

UK Head of Retail

KPMG in the UK


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Covering the four weeks 30 June – 27 July 2019

  • On a total basis, sales increased by 0.3% in July, against an increase of 1.6% in July 2018. This is the lowest figure recorded for the month of July since our records began in 1995 and comes after the worst June on records. This is above the 3-month average of -1.3% but below the 12-month average of 0.5%. This is the lowest 12-month average on records. 
  • UK retail sales increased by 0.1% on a Like-for-like basis from July 2018, when they had increased 0.5% from the preceding year. 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 is worse than the 12-month Total average decline of 2.6%.
  • Over the three months to July, Food sales decreased 1.0% on a Like-for-like basis and 0.3% on a Total basis. This is below the 12-month Total average growth of 1.8% and the lowest 3-month average since December 2014, excluding Easter distortions.
  • Over the three-months to July, Non-Food retail sales in the UK decreased by 2.0% on a like-for-like basis and 2.1% on a Total basis. This is below the 12-month Total average decrease of 0.6%. For the month of July, Non-Food was in growth year-on-year. 
  • Online sales of Non-Food products grew 3.7% in July, against a growth of 7.5% in July 2018. The 3-month and 12-month average growths were 3.1% and 4.7% respectively. 
  • Non-Food Online penetration rate increased from 28.4% in July 2018 to 29.8% last month.

Paul Martin, UK Head of Retail | KPMG

“The UK may have had record temperatures in July, but retail sales were far from record-breaking at just 0.3% growth. While any growth is welcome after two months of decline, it’s clear that most players need more than sunshine to get back on their feet.

“Given the weather it’s unsurprising that shoppers reconsidered their wardrobe, but it was online retailers who benefitted 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. 

“With consumer confidence holding up in the face of prolonged Brexit uncertainty, shoppers are notably disengaged overall. The pressure continues to build between online and physical offerings, costs continues to rise and the demands of consumers continue to grow. The key question is, who can handle the heat?

Helen Dickinson OBE, Chief Executive | British Retail Consortium

“While retailers will welcome the return to growth, it has nonetheless been a punishing few months for retailers. The combination of slow real wage growth and Brexit uncertainty has left consumer spending languishing with the 12-month average total sales falling to a new low of just 0.5%. 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 1 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.”

Food & Drink sector performance | Susan Barratt, CEO | IGD

"Success for England's big sporting teams tends to provide a boost for food and drink sales, so the men's cricket and the women's football teams were both good for business in June. However, the same applied last year with similar sporting success, and the year-on-year comparison was a draw with flat food and grocery sales. 

"There has been some inflation though, meaning a drop in real terms and the underlying conditions are tight for food retailers."


- ENDS -


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About the British Retail Consortium

The BRC’s purpose is to make a positive difference to the retail industry and the customers it serves, today and in the future.

Retail is an exciting, dynamic and diverse industry which is going through a period of profound change. The BRC is committed to ensuring the industry thrives through this period of transformation. We tell the story of retail, work with our members to drive positive change and use our expertise and influence to create an economic and policy environment that enables retail businesses to thrive and consumers to benefit. Our membership comprises over 5,000 businesses delivering £180bn of retail sales and employing over one and half million employees.


About KPMG in the UK

KPMG LLP, a UK limited liability partnership, operates from 22 offices across the UK with approximately 16,300 partners and staff. The UK firm recorded a revenue of £2.338 billion in the year ended 30 September 2018. KPMG is a global network of professional firms providing Audit, Tax, and Advisory services. It operates in 154 countries and has 200,000 professionals working in member firms around the world. The independent member firms of the KPMG network are affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity. Each KPMG firm is a legally distinct and separate entity and describes itself as such.

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