World Cup fever boosts June retail sales

June retail sales

The World Cup has inspired Brits to open their wallets and spend, with total retail sales in June rising 2.3 per cent.

According to the monthly BRC-KPMG Retail Sales Monitor, this was the joint second-biggest increase of 2018 and compared to an increase of two per cent recorded in June last year.

May has so far been the best month of 2018, when a 4.1 per cent uptick was recorded.

Last month’s sales boost came about from excitement around England’s progress in the World Cup as people spent on beer, BBQs and TVs.

However, on a like-for-like basis sales had slowed, with a 1.1 per cent increase compared to May’s increase of 2.8 per cent.

It is also slightly slower than June 2017, when like-for-like sales increased 1.2 per cent from the preceding year.

“Beer, BBQs and big TVs lifted June’s sales as warm weather and world cup fever gripped the nation,” BRC chief executive Helen Dickinson said.

“However, with consumers engrossed in the agony and ecstasy of each match, spending on many other items fell. In the end, June scored solid, but not sensational, sales.

“The reality is that sales don’t grow on the feel-good factor alone. With household incomes still barely growing faster than inflation, conditions for consumers and retailers remain extremely tough.”

Over the three months to June, in-store sales of non-food items declined 1.4 per cent on a total basis and 2.7 per cent on a like-for-like basis.

However, this is an improvement over the 12-month total average decline of 2.4 per cent.

During that same period, food sales increased 0.3 per cent on a like-for-like basis and 1.7 per cent on a total basis.

This is below the 12-month total average growth of 3.7 per cent but includes April, which was negatively distorted by the timing of Easter.

Also during that three-month period, non-food retail sales in the UK decreased 0.2 per cent on a like-for-like basis and increased 0.8 per cent on a total basis.

This is higher than the 12-month total average decrease of 0.1 per cent and the best three-month average since September.

BRC and KPMG also said this was the second consecutive month of growth in non-food.

Meanwhile, online sales of non-food products grew 8.5 per cent in June, against a growth of 10.1 per cent in June 2017.

This is below the three-month average of nine per cent but above the 12-month average of 7.9 per cent.

“After May’s positive retail performance, June’s results turned out to be less buoyant than hoped for,” KPMG’s Paul Martin said.

“Sales growth remained in positive territory for the second month running at 2.3 per cent, but as the recent financials of key players’ highlights, sales growth and profitability don’t always go hand-in-hand.

“Grocers benefitted from the brighter weather and of course the World Cup, with BBQs and picnics firmly on the menu, and the weather and holiday season are also likely to be behind the uptick in online fashion sales too.

“But with so much attention outdoors, other household categories didn’t fare exceptionally well.

“The summer sunshine, Wimbledon and the on-going World Cup provide a strong foundation for growth in July, but retailers need to ensure that sales translate into profit.

“With the structural changes the sector is experiencing, as well as increased costs, this is becoming increasingly difficult to achieve.”

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