UK retailers benefit from England World Cup run and heatwave

July 14, 2018, 11:12 am
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Source: The Guardian

Sales rose by 2.3% in June, with boost from exceptional sales of drinks in final week

Britain’s retailers are benefiting from England’s continuing World Cup run and the warm weather boosting beer, barbecue and big-screen TV sales, despite the severe underlying challenges facing the high street.

Suggesting deep problems remain for retailers as they close hundreds of stores across the country, the British Retail Consortium (BRC) and KPMG said World Cup fever sweeping the nation along with a heatwave helped paper over the cracks for the industry in June.

The latest health check for the high street showed total retail sales rose by 2.3% across the UK last month, above the average growth rate for consumer spending and higher than an increase of 2% in the same month a year ago. Grocery sales were particularly strong, thanks largely to exceptional sales of drinks in the final week because of the hot weather and England advancing through the group stages of the tournament in Russia.

Coming after one of the best months in recent years in May, when shops benefited from the rising mercury at the start of the summer heatwave and celebrations across the country for the royal wedding, the performance in June will provide some cheer for struggling retailers. Observers said the sales were solid, although far from sensational.

Retailers including House of Fraser, Marks & Spencer and Mothercare are in the process of closing shops and cutting jobs to stay afloat, amid weaker levels of consumer spending across Britain since the EU referendum two years ago.

Household incomes are growing barely faster than inflation after the Brexit vote pushed up the cost of imports. Helen Dickinson, the chief executive of the BRC, said: “The reality is that sales don’t grow on the feelgood factor alone. Once the euphoria of sporting success subsides, without a deal on Brexit, shoppers face the prospect of significant price increases and shortages of everyday goods.”

The BRC/KPMG survey showed the continuing shift towards online shopping – increasingly a factor in the decline of the high street – with sales growth of 8.5% last month. Although the rise was below the three-month average for Britain, the growth rate still outstrips the overall increase in sales.

Despite the stronger performance for food and drink, sales of furniture, footwear, household appliances and stationary all declined.

Like-for-like sales across all categories, which strip out the impact of spending at stores open less than a year, increased by 1.1% in June compared to a rise of 1.2% seen in the same month a year ago.

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