The British Retail Consortium reported that U.K. retail comp store sales increased 0.6 percent in July on top of a 0.5 percent in July 2010. Total sales were up 2.5 percent on top of a 2.6 percent increase in July 2010.
The BRC warned that much of July's small increase was due to clearance sales and “consumer confidence needs to be restored quickly before spending paralysis sets in.”
Food sales growth picked up in July after a poor June. Clothing and footwear picked up after a tough June, helped by clearance sales. Homewares were mostly down on a year ago and often promotion-led. Consumer caution continued to hit big-ticket housing-related purchases.
Non-food non-store (Internet, mail-order and phone) sales growth slowed after June's clearance-led uplift. Sales were 9.6 percent higher than a year ago, compared with an 11.5 percent increase in June and 11.3 percent growth in July 2010.
“This is a modest improvement on recent months but overall conditions remain very difficult for retailers,” commented BRC Director General Stephen Robertson, in a statement. “When you take into consideration inflation and January's increase in VAT, 2.5 percent growth effectively means people are buying fewer goods.”
He continued, “Food sales continue to outperform non-food with inflation helping to drive top-line growth. But shoppers were only tempted into stores by an unprecedented number of promotions which come at the expense of margins. Sales of non-food goods barely grew, though clearance events helped summer clothing in particular.”
