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UK shopper spending slowed in July as moist climate damped demand for summer time clothes, leaving general retail gross sales progress effectively under the speed of inflation, in response to knowledge revealed on Tuesday.
The worth of retail gross sales rose at an annual price of 1.5 per cent in July, a weaker studying than the typical of three.3 per cent within the three months to July, and the 12-month common of three.9 per cent, figures from the British Retail Consortium commerce physique and the advisory agency KPMG confirmed.
The figures will not be adjusted for inflation and these progress charges had been decrease than the speed of improve in shopper costs, which stood at 7.9 per cent in June, indicating that gross sales fell in quantity phrases.
Helen Dickinson, chief govt of the BRC, mentioned the slowdown was partly a mirrored image of inflation beginning to slacken, however she added that the damp climate “did no favours to gross sales of clothes”, whereas on-line spending fell yr on yr as a post-pandemic return to bricks and mortar shops continued.
Paul Martin, UK head of retail at KPMG, mentioned that whereas UK shoppers had proved resilient within the face of value of residing pressures, “stubbornly excessive inflation coupled with quickly rising rates of interest will take a look at their means and willingness to maintain on spending for the remainder of this yr”.
The BRC and KPMG knowledge paints an analogous image to separate figures launched on Tuesday by the funds firm Barclays, which displays virtually half of UK credit score and debit card transactions.
They confirmed annual progress in shopper card spending had slowed from 5.4 per cent in June to 4 per cent in July, once more effectively under the speed of shopper value inflation.
However whereas Barclays additionally mentioned the month had been a washout for clothes retailers, it discovered shoppers had been turning to moist climate options, with spending on takeaways and digital content material rising by 9.2 per cent and 9.9 per cent, respectively.
In the meantime, reside occasions, together with the beginning of pre-booking for the singer Taylor Swift’s “The Eras” tour, boosted spending on leisure.
This, together with sturdy journey bookings, meant spending on non-essentials grew sooner — at an annual price of 5.6 per cent — than it did in supermarkets, the place value rises had been lastly slowing.
Abbas Khan, UK economist at Barclays, mentioned the headwinds of excessive inflation had been abating, however this is able to be offset by rising mortgage prices as owners reached the tip of fixed-rate offers.
“Accordingly, whereas we don’t count on a shopper recession within the coming quarters, progress is prone to be meagre,” he mentioned.