Retail sales growth slows in June
UK retail sales recorded the slowest total growth rate in three years in June as consumers concerns over a potential rise in interest rates came to the fore.
According to figures released by the British Retail Consortium, sales were up 0.6% year-on-year on a total basis but on a like-for-like basis sales fell by 0.8%
Excluding Easter distortions, this was the lowest total growth recorded since May 2011. However, the three-month average of 2.6% was in line with the twelve-month average of 2.5%.
David McCorquodale, head of retail at KPMG, said: "Concern over a potential rise in interest rates is having a dampening effect on retail sales. June saw the brakes applied to spending as shoppers put purchases of big ticket items on hold whilst they waited to see if the Bank of England would take action on interest rates. Even sales of home accessories and furniture flat-lined, which is surprising given the UK is reportedly in the midst of a housing boom."
Over the last three months, food showed almost no total growth, at 0.1%, while like-for-like sales fell by 2%. Non-food reported total growth of 4.7% in the period with like-for-like sales rising by 3.6%.
While the food sector struggled, clothing retailers fared better as the warmer weather drove demand for summer clothes and shoes.
BRC director general Helen Dickinson said: "Consumers continue to benefit from competitive pricing, which may be the cause of softer like-for-like sales in June. For retailers, it’s a bit of a mixed picture, with food sales down and non-food sales up but at a slower rate than in June.
"On the other hand, the total value of overall food sales is still in decline but the lower pricing policies we have witnessed are good news for consumers who are set to continue to benefit from keen bargains in their shopping baskets."
Online sales of non-food products in the UK grew 10.6% in June versus a year earlier. The non-food online penetration rate was 17.2% in June, 0.9 percentage point higher than in June 2013.
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