BRC-KPMG: June boosted by Jubilee

UK retail sales values were up 1.4% on a like-for-like basis from June 2011, when they were down 0.6% on a year ago. On a total basis, sales were up 3.5%, against a 1.5% rise in June 2011.

The Jubilee celebrations and warm weather saw a strong start to trading period. Food and drink, clothing and footwear and online all performed particularly well during the week preceding the Jubilee.

The remainder of the month proved much more challenging throughout the sector. Discretionary and big-ticket items continued to struggle as consumers’ underlying caution about the economy, jobs and their personal finances curtailed spending.

Online (including mail-order and phone) sales of non-food items showed stronger growth, up 12.1% against growth of 11.5% last year. Sales growth returned to levels more consistent with the 12-month average.

Stephen Robertson, Director General, British Retail Consortium, said: "It was the bunting boost. June was saved by the feelgood lift of the Jubilee, showing how crucial these temporary factors are in our difficult trading conditions.

"A trip to the shops played a big part in preparations for the occasion. The week leading up to the long weekend was a stand-out for the retail sector. Food and clothing and footwear retailers had the best of it as people bought in special food and drink and, encouraged by warmer weather, some treated themselves to shorts, dresses and sandals.

"Sadly the soggy celebrations over the Jubilee weekend itself, which heralded the start of the wettest June on record, were followed by far weaker business for the rest of the month. Belts were tightened again and the lower temperatures cooled demand for summer fashions and outdoor leisure goods.

"With the first half of the year complete, we can see total sales growth between this January and June was no better than in 2011. It‟s clear a permanent upturn in confidence and spending has yet to happen. Scrapping next month‟s fuel duty rise will help hard-pressed customers and businesses. The Government needs to be equally supportive as it considers where next for other costs it controls."

Helen Dickinson, Head of Retail, KPMG, said: "In June, following a mini Jubilee boost, most sectors achieved positive like-for-like growth for the month as a whole. However, women’s clothing continues to find the going tough because fashion spending is especially discretionary and we’ve all forgotten what the sun looks like! The double whammy of uncertain sales levels and ongoing promotional activity continues to hit profits and cash flows.

"Retailers are fervently hoping that the summer of sport will raise cash for their coffers. But the reality is that any benefit from the Olympics will probably be concentrated in the South East and provide more of a boost for food than non-food. Overall there will be plenty of hype, a short term blip of benefit, and then back to normality and the challenges that brings."

Source : BRC
www.brc.org.uk/brc_news_detail.asp?id=2253