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Retail sales see slight improvement in June

Retail sales improved slightly last month, according to figures released by the British Retail Consortium, but continue to come under pressure from a lack of consumer confidence and a squeeze on disposable incomes.

GENERAL MERCHANDISE

Retail sales see slight improvement in June

Total sales across the UK rose 1.5% year-on-year in June compared to the 0.3 % decline see in May. Like-for-like sales were down 0.6% for the month compared to the 2.1% drop in May.

Food sales growth slowed a little further, up 5.3% on the year with like-for-like sales up 2.6%. Non-food sales showed a modest improvement of 0.8%, driven by clearance sales starting earlier this year. 

Non-food non-store sales growth (internet, mail-order and phone) picked up slightly  in June after two slower months. Sales were 11.5% higher than a year ago, compared with 10.4% in May said BRC.

Stephen Robertson, director general, British Retail Consortium, said: "Given June's spate of shop closure announcements and weak company results, these figures are not as bad as they could have been but it shows just how tough times are when total sales growth of 1.5 per cent is regarded as not that bad. And remember, the higher VAT rate is making the year-on-year comparison look better than it really is, while retailers are coping with higher costs because of increased utility bills, rates and the burden of regulation.

"Sales continue to be under huge pressure from the squeeze on disposable incomes produced by rising inflation and low wage growth. Underlying conditions are still tough but being masked by a minor revival in non-food sales driven by price cuts and clearance events starting earlier this year.

"The modest sales improvement has been concentrated on less expensive things - home textiles and accessories - rather than big-ticket items."

Helen Dickinson, head of retail, KPMG, said: "Across non-food, it was a better month than May. But we are certainly not out of the woods yet, as highlighted very starkly with the demise of a number of well-known brands during the course of June. Other than in food, many retailers continue to seek to reduce capacity through store closures. However, it was a welcome relief to know that May was not indicative of a new norm.

"All sectors, except women's clothing and footwear, achieved an improved performance. Food prices, and to a lesser extent non-food prices, continue to rise given the ongoing cost price pressures. Inflation and a higher level of VAT (20% this June and 17.5% last) is included in the measured sales value, and hence underlying volumes of sales continue to fall."

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