BRC-KPMG RETAIL SALES MONITOR – JULY 2021
Retail sales strong but slowing
Retail sales strong but slowing
Now we have passed the comparison period in 2020 that was under strict lockdown, this analysis will return to primarily reporting the sales results on a year-on-year basis. However, for certain measures the two-year comparison will remain useful and will be clearly signposted.
Covering the four weeks 4 – 31 July 2021
- On a Total basis, sales increased by 6.4% in July, against a growth of 3.2% in July 2020. This is below the 3-month average growth of 14.7% and the 12-month average growth of 10.4%.
- On a 2-year basis, Total retail sales grew by 9.1%.
- UK retail sales increased 4.7% on a Like-for-like basis from July 2020, when they had increased 4.3% from the preceding year. This is below the 3-month average growth of 9.7% and the 12-month average growth of 11.1%.
- Over the three months to July, In-Store sales of Non-Food items grew 64.9% on a Total basis. This was above the 12-month average growth of 20.0%.
- On a 2-year basis, stores saw a decline of 3.6% over the last three months.
- Over the three months to July, Food sales increased 2.9% on a Total basis and increased 0.8% on a Like-for-like basis. This is below the 12-month Total average growth of 5.6%. For the month of July, Food was in growth year-on-year.
- Over the three-months to July, Non-Food retail sales increased 24.6% on a Total basis by and 17.6% on a like-for-like basis. This is above the 12-month Total average decline of 14.4%. For the month of July, Non-Food was in growth year-on-year.
- On a 2-year basis, Non-Food sales saw growth of 12.5% for the three-months to July.
- Online Non-Food sales increased by 0.6% in July, against a growth of 41.0% in July 2020. This is above the 3-month average decline of 4.6%, but below the 12-month average growth of 36.4%.
- Non-Food Online penetration rate decreased to 48.4% this July from 54.0% in July 2020. While down on last year, it was up on the 29.7% seen at the same point in 2019.
Helen Dickinson OBE, Chief Executive | British Retail Consortium
“July continued to see strong sales, although growth has started to slow. The lifting of restrictions did not bring the anticipated in-store boost, with the wet weather leaving consumers reluctant to visit shopping destinations. Online sales remained strong, and with weddings and other social events back on for the summer calendar, formalwear and beauty all began to see notable improvement, so fashion outlets in particular saw a bounce back to pre-pandemic levels. As many people prepare to return to the workplace, purchase of home office equipment began to fall after months of high sales, meanwhile other homeware, such as furniture and household appliances continued to do well.
“However, the vacancy rate is continuing to rise. Many shops and local communities have been battered by the pandemic, with many high streets in need of further investment. Unfortunately, the current broken business rates system continues to hold back retailers, hindering vital investment into retail innovation and the blended physical-digital retail offering. The Government must ensure the upcoming business rates review permanently reduces the cost burden to sustainable levels. Retailers want to play their part in building back a better future for local communities, and Government must give them the tools to do so.”
Paul Martin, UK Head of Retail | KPMG
“Retail sales continued to grow in July, although at a slower rate as the reopening of the hospitality and leisure sectors led to a dilution in consumer spending.
“Whilst the high street saw continued growth in July, with sales up 6%, unsurprisingly online sales fell back - although less than expected - by -0.4% compared to July 2020. Both women’s and men’s clothing continued their revival with strong growth in-store and online. Many other non-food categories had a less strong performance, especially those related with the home after the house moving frenzy of recent months started to abate. With better weather and school holidays underway, consumers are happy to shop for clothes, shoes and accessories for those much needed social events.
“Over the coming months the health of the sector is expected to grow at a much slower rate as retailers face increasing challenges on a number of fronts. Staffing pressures, increases in commodity and component costs, rising inflation eating into households’ spending power and stalling consumer confidence could lead to a slowdown in retail sector growth as we head into autumn.”
Food & Drink sector performance | Susan Barratt, CEO | IGD
“UK food and drink sales returned to growth in July, following several months where sales struggled to match the high peaks of sales generated post-Easter in 2020. As well as the Euro 2020 football tournament, the UK experienced two exceptional weeks of hot weather in July, providing ample opportunities for shoppers to celebrate with food and drink.
“However, while sales were boosted in July, looking forward there are many challenges to overcome. The UK’s K-shaped recovery persists; IGD’s ShopperVista insight reveals higher income groups believe they are more likely to be better off financially (23%) than worse off (20%) in the year ahead. In contrast, lower income groups are more likely to believe they will be worse off (23%) than better off (15%). Furthermore, shoppers are increasingly concerned about food and grocery price inflation, with 16% of shoppers expecting that prices will get much more expensive in the year ahead, up from just 8% of shoppers in April’21.”
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