Retail sales improve boosted by summer sales

Retail sales rose 1.5 per cent in June, with non-food sales driven by price cuts and summer clearance sales, says the British Retail Consortium (BRC).

Non-food sales showed a ‘modest improvement’ last month, according to the BRC-KPMG Retail Sales Monitor June 2011.

Retailers launched clearance sales earlier this year in a bid to encourage consumer spending.

Stephen Robertson, director general of the BRC, comments, ‘Given June’s spate of shop closure announcements and weak company results, these figures are not as bad as they could have been but it shows just how tough times are when total sales growth 1.5 per cent is regarded as not that bad.’

Homewares benefited more than clothing and footwear from the summer sales, as many consumers purchased clothes in April during the warm weather.

Non-food non-store sales growth, which includes internet, mail order and phone purchases, were 11.5 per cent higher than a year ago.

Robertson warns that the higher VAT rate makes the year-on-year comparison ‘look better than it really is’.

KPMG’s head of retail Helen Dickinson says June was a better month than May, adding that ‘it was a welcome relief to know that May was not indicative of a new norm’.

She continues, ‘Food prices, and to a lesser extent non-food prices, continue to rise given the ongoing cost price pressures. Inflation and a higher level of VAT (20 per cent this June and 17.5 per cent last) is included in the measured sales value, and hence underlying volumes of sales continue to fall.’