Retail sales growth ticked up slightly in June as hot weather prompted purchases of summer essentials, including garden furniture.
According to the latest BRC-KPMG Retail Sales Monitor for June 2023, UK total retail sales increased by 4.9%, against a decline of 1% in June 2022. This is above the 3-month average growth of 4.6% and the 12-month average growth of 4%.
UK Like-for-like retail sales increased by 4.2% in June, against a decline of 1.3% in June 2022. This was below the 3-month average growth of 4.3% and above the 12-month average growth of 3.6%.
Food sales increased 9.8% on a Total basis and 10.1% on a Like-for-like basis over the three months to June. This is above the 12-month Total average growth of 7.7%. For the month of June, Food was in growth year-on-year.
Non-Food sales increased 0.3% on a Total basis and decreased 0.5% on a like-for-like basis over the three-months to June. This is below the 12-month Total average growth of 0.8%. For the month of June, Non-Food was in growth year-on-year.
Over the three months to June, In-store Non-Food sales increased 2.0% on a Total basis and 0.6% on a Like-for-like basis since June 2022. This is below the Total 12-month average growth of 3.7%.
Online Non-Food sales decreased by 1.0% in June, against a decline of 9.1% in June 2022. This is shallower than the 3-month average decline of 2.4% and the 12-month decline of 3.2%.
The proportion of Non-Food items bought online (penetration rate) decreased to 35.3% in June from 35.9% in June 2022.
Helen Dickinson OBE, Chief Executive | British Retail Consortium, said: “Sun-seekers headed to their favourite retailers to buy swimwear and beach towels, and outdoor games, garden furniture and barbecue food were boosted as families came together to celebrate Father’s Day. People were much more cautious about big-ticket purchases like furniture and technology equipment.
“Consumer confidence remains fragile. But, with headline food inflation easing for two months in a row as prices of essentials start to fall thanks to stiff competition and consumers continuing to shift shopping patterns to mitigate as much inflation as they can, confidence could improve. However, retailers’ efforts to bring down prices could be derailed by costly reforms to the packaging levy (Extended Producer Responsibility) and a new deposit return scheme putting an inflationary £4bn burden on retailers. A hike to business rates is also on the cards for next April. Government must look at how these costly policies will impact inflation and consumers and think again.”
Paul Martin, UK Head of Retail | KPMG, said: “The sun was shining on retailers in June, with the warm weather bringing consumers back out to the high street and like for like sales up nearly 5% on last year.
“Sales of suntan lotion, food and clothing were all given a boost as consumers made the most of the record June temperatures. Online sales continued to fall, but at a much lower rate, with household appliances and gardening equipment proving popular.
“Apart from a blip in May, retail sales growth has remained steady at around 5% every month in the first half of this year. However, the growth comes against a background of much higher inflation levels – resulting in reduced margins and profitability for operators across the sector.
“As we move into the last half the year, retailers will be hoping that anticipated falls in inflation start to deliver stronger sales growth in order to improve the overall health of the sector. The wild card continues to be food inflation which remain stubborn, and is having a negative impact on consumers’ ability to spend on non-essential items.
“Consumers have so far remained resilient, but the triple threats of further interest rate hikes, resolute double digit food inflation and an economy recovering at slower rate than predicted, could hamper a return to much needed profitable growth across the retail sector.”