Tuesday July 15, 11:58 AM
Weather Hits High Street Sales
By Sky News
High street retailers failed to hold on to a sales lift as tighter household budgets and changeable weather kept shoppers off the streets in June. The British Retail Consortium said like-for-like sales fell 0.4% last month compared to a year
ago - a reversal of the 1.4% boost seen during what was the warmest May on record.
Clothing and footwear sales were the biggest losers in June, with furniture and homewares slipping further below previous year levels.
In more evidence that disposable incomes are being hit by soaring petrol, energy and food prices, last month's sales falls came despite "some of the strongest discounts and promotions in decades", the BRC said.
Underlying sales on the high street have now been lower than a year ago for three of the past four months, the consortium added, making this the worst summer since 2005.
The BRC said: "Changeable weather, after May's warm sun, hit sales in June. A
few sunny days together with clearance events helped some but underlying trade
remained tough, with widespread discounting."
Food and drink was the only sector to show significant growth, the BRC said, although this was compared to a comparatively weak figures during last year's washout June.
Clothing sales fell back below prior year, with more spent on basic essentials and smaller accessories rather than discretionary spending.
Sales of furniture, flooring and homewares were "well below" year-earlier levels, but computer game and console sales remained strong.
Total high street sales rose 2.1% in June compared to prior year, down from the 4.6% growth seen during May.
Official data on Monday showed factory gate prices rose at an annual rate of 10% last month, mainly fuelled by higher food and oil costs.
Helen Dickinson, head of retailing at KPMG, said: "Although total retail sales grew by 2.1% in June, they continue to be impacted both by food inflation and the wider economic climate.
"Consumers are managing their budgets carefully to mitigate the effects of these inflationary pressures and the food retailers continue to focus on keeping consumer prices down through high-profile promotional activity, despite the increase in oil and commodity prices."
She added: "This environment is a hugely challenging one for retailers - for the food retailers with their own costs continuing to rise, and for non-food retailers trying to win back a greater 'share of wallet'."
Last month, figures from the Office for National Statistics showed retail sales rose 3.5% between April and May - in stark contrast to two successive sales falls in previous months as the consumer spending slowdown tightened its grip.
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