While retail sales saw an increase in July year-on-year, the figure was still below the latest 12th month average growth, according to the latest information released by the British Retail Consortium (BRC).
On a total basis, retail sales increased by 2.3% in July, against an increase of 6.4% in July 2021. This is below the 3-month average of 0% and the 12-month average growth of 2.7%.
Over the three months to July, food sales increased 2.3% on a total basis and 1.8% on a like-for-like basis. This is above the 12-month total average growth of 0.6%. For the month of July, food was in growth year-on-year.
Consumer confidence
Helen Dickinson OBE, chief executive of the BRC, said that sales improved in July as the heatwave boosted sales of hot weather essentials. She added: “However, with inflation at over 9% many retailers are still contending with falling sales volumes during what remains an incredibly difficult trading period.
“Consumer confidence remains weak, and the rise in interest rates coupled with talk of recession will do little to improve the situation. The Bank of England now expects inflation to reach over 13% in October when energy bills rise again, further tightening the screws on struggling households. This means that both consumers and retailers are in for a rocky road throughout the rest of 2022.”
Susan Barratt, CEO of the Institute of Grocery Distribution (IGD) said: “July’s food and drink value sales were again flattered by inflation, masking some ongoing dips in sales volumes. Shoppers are genuinely tightening their belts by buying fewer items in addition to switching stores and buying more private label products.”
She added: “Our Shopper Confidence Index improved a little in July, no doubt boosted by England’s Lionesses successful Euro 2022 football campaign. Plus, the heatwave and one in four families receiving the first cost of living payment, fewer were impacted by rising energy bills (68% compared to 74% in April 2022). However, with food price inflation forecast to increase in the coming months and Ofgem expected to announce a significant increase in the energy price cap at the end of August, there are still significant challenges ahead.”
This article first appeared in Food Management Today
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