19 July 2018
This morning’s June 2018 retail sales stated “strongest three-month-on-three-month growth since May 2001”. However, looking further into the figures, it shows that June was down, admittedly on a strong April and May, according to one retail expert.
The key findings from the Retail Statistics showed:
- In the three months to June 2018, the quantity bought in retail sales increased by 2.1%; the largest increase since February 2015, with growth across all main sectors.
- Food stores saw the strongest three-month on three-month growth since May 2001 at 2.2%, with feedback from supermarkets suggesting that the continued good weather and World Cup celebrations had encouraged food and drink sales.
- While hot weather and World Cup celebrations increased food store sales, it was suggested by retailers that these factors resulted in a decrease in footfall in non-food stores; which, along with non-store retailing, resulted in a monthly decline of 0.5% in the quantity bought.
- The decline of 0.5% in June 2018, when compared with the previous month, also followed two months of strong growth in April and May 2018.
- Online sales as a total of all retailing remained unchanged at 18.0%; online spending in clothing and footwear stores continued to achieve new record proportions of online retailing, for the fourth consecutive month, at 17.5%.
Phil Mullis, Partner and Head of Retail and Wholesale at top-20 UK accountancy firm, Wilkins Kennedy, said: “Despite reports of some of the strongest growth in the sector since 2001, the figures from the previous two months, April and May, made up for sluggish growth from Quarter 1, 2018. June 2018 saw a reduction against May. Exceptionally good weather and the start of the World Cup gave a boost for food but non-food suffered.
“Even though the sector may benefit from this event, a potential boost in sales does not quite translate into sustained growth. A number of retailers continue to reduce their high street presence, in particular, both Mothercare and The Original Factory Shop via Company Voluntary Arrangement. In addition, we have seen the discount chain, Poundworld, fall into administration. Retail is fiercely competitive and, arguably, over-supplied and drops in footfall are biting into store estates.
“We also have to consider the overall backdrop of the economy. Wage growth over inflation is positive but people are still feeling the squeeze. That might be why some of the latest retail sales figures show a boost in some areas, such as grocery and not others. Simply because people are choosing more wisely about where they spend any spare cash.”
“We hope to see growth during July from the knock out stages of the World Cup – particularly as consumers enthusiastically backed England through the final stages. Let’s hope this has a positive impact on the figures but more needs to be done to ensure any growth is sustainable.”