Retail sales slow as households spend less

RETAILERS EXPERIENCED slowing sales last month as households reined in their spending amid mounting pressure on their finances.

Figures from the British Retail Consortium (BRC) and KPMG showed like-for-like sales grew by 0.9 per cent in July, down from 1.1 per cent for the same month last year.

It also marked a decline in contrast to June’s performance a month earlier when like-for-like sales rose by 1.2 per cent.

BRC chief executive Helen Dickinson said food sales were the main growth driver as nonfood sales slipped into reverse.

She said: “Sales growth slowed in July from June. That said, given the strong performance of the same month the previous year, the figures are fairly solid. Closer inspection of the headlines, however, unveils some familiar challenges. The month’s growth was underpinned by food sales alone, while non-food sales relapsed into negative territory as the competition heats up over a shrinking pool of discretionary consumer spending power.

“Despite the gloomy picture for non-food overall, there were some success stories.

“The homewares category for instance, which lost out in the previous month to summer wardrobe purchases, moved to the top of the performance rankings.”

Total sales rose by 1.4 per cent last month, easing back from 1.9 per cent in 2016 and below June’s performance of two per cent.

Households have seen their spending power come under sustained pressure from lacklustre wage growth and higher inflation, leading to an expansion of credit and a decline in savings.

The cost of living had reached a near four-year high of 2.9 per cent in May, before unexpectedly falling to 2.6 per cent in June.