UK Retail Analysis – July 2021

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The British Retail Consortium has released its Retail Sale Monitor report for July 2021. The report was produced by the BRC in partnership with KPMG. July’s report sees the rain dampening Freedom Day demand…

Headline Statistics

  • In July, UK retail sales increased 4.7% on a Like-for-like basis from July 2020, when they had increased 4.3% from the preceding year.
  • On a Total basis, sales increased by 6.4% in July, against a growth of 3.2% in July 2020. This is below the 3-month average growth of 14.7% the 12-month average growth of 10.4%.
  • Over the three months to July, In-Store sales of Non-Food items grew 64.9% on a Total and increased 48.1% on a Like-for-like basis. This was above the 12-month average growth of 20.0%. On a 2-year basis, stores saw Like-for like growth of 10.7% over the last three months.
  • Over the three months to July, Food sales increased 0.8% on a Like-for-like basis and increased 2.9% on a Total basis. This is below the 12-month Total average growth of 5.6%. For the month of July, Food was in growth year-on-year.
  • Over the three months to July, Non-Food retail sales increased by 17.6% on a like-for-like basis and 24.6% on a Total basis. This is above the 12-month Total average decline of 14.4%. For the month of July, Non-Food was in growth year-on-year.
  • Online Non-Food sales increased by 0.6% in July, against a growth of 41.0% in July 2020. This is above the 3-mth average decline of 4.6%. Non-Food Online penetration rate decreased from 54.0% in July 2020 to 48.4% this July.

Commentary:

Helen Dickinson OBE, Chief Executive, British Retail Consortium, said:

“July continued to see strong sales, although growth has started to slow. The lifting of restrictions did not bring the anticipated in-store boost, with the wet weather leaving consumers reluctant to visit shopping destinations. Online sales remained strong, and with weddings and other social events back on for the summer calendar, formalwear and beauty all began to see notable improvement, so fashion outlets, in particular, saw a bounce back to pre-pandemic levels. As many people prepare to return to the workplace, purchase of home office equipment began to fall after a month of high sales, meanwhile other homeware, such as furniture and household appliances continued to do well.”

“However, the vacancy rate is continuing to rise. Many shops and local communities have been battered by the pandemic, with many high streets in need of further investment. Unfortunately, the current broken business rates system continues to hold back retailers, hindering vital investment into retail innovation and the blended physical-digital retail offering. The Government must ensure the upcoming business rates review permanently reduces the cost burden to sustainable levels. Retailers want to play their part in building back a better future for local communities, and Government must give them the tools to do so.”

Paul Martin, Retail Partner, KPMG said:

“Retail sales continued to grow in July, although at a slower rate as the reopening of the hospitality and leisure sectors led to a dilution in consumer spending. Whilst the high street saw continued growth in July, with sales up 6%, unsurprisingly online sales fell back – although less than expected – by -0.4% compared to July 2020.  

Both women’s and men’s clothing continued their revival with strong growth in-store and online. Many other non-food categories had a less strong performance, especially those related with the home after the house moving frenzy of recent months started to abate.  With better weather and school holidays underway, consumers are happy to shop for clothes, shoes and accessories for those much-needed social events.

Over the coming months the health of the sector is expected to grow at a much slower rate as retailers face increasing challenges on a number of fronts.  Staffing pressures, increases in commodity and component costs, rising inflation eating into households’ spending power and stalling consumer confidence could lead to a slowdown in retail sector growth as we head into autumn.”

As a member of the BRC, the MIA can share the full report with our members. If you would like to see the full report, please contact alice@mia.org.uk