UK retail sales volumes fall in June on inflationary pressures

The BRC says that in 2020/21 much of UK retail “bounced between open and close”, which had a significant impact on sales and changing consumer behavior.

“Sales volumes are falling at a pace not seen since the low of the pandemic, as inflation continues to bite and households cut back on spending. Discretionary purchases have been hit hard, especially white goods and items while consumers also shifted to cheaper brands in the food and non-food sectors.While the Jubilee weekend temporarily boosted food sales and fashion sales benefited from the summer holidays and the wedding season, this was not enough to counter the significant slowdown in consumer spending.

“Retailers are caught between significantly rising costs in their supply chains and protecting their customers from price increases. The government needs to get creative and find ways to help relieve some of this cost pressure – the upcoming consultation on transitional relief is a golden opportunity to ensure retailers don’t overpay on their business rate invoices. Government action on transitional relief would make a significant difference to retailers’ costs and ease pricing pressure for customers.

Five weeks from May 29 to July 2, 2022 in UK retail

• On a total basis, sales fell 1% in June, compared to an increase of 10.4% in June 2021. This is lower than the three-month average decline of 0.8% and the 12-year average growth. 3% month.
• Retail sales in the UK fell 1.3% like-for-like compared to June 2021, when they had increased by 6.7%. This figure was higher than the 1.5% average three-month decline and lower than the 1% 12-month average growth.

Three months to June United Kingdom detail

• Non-food retail sales fell by 3.3% overall and by 4.2% on a like-for-like basis. This figure is lower than the total average growth over 12 months of 5%. For the month of June, non-food is down year on year.
• In-store sales of non-food items increased 2.2% on a total basis and 0.6% on a like-for-like basis since June 2021. This figure is below the 35.5% year-over-year growth.
• Online food sales fell 9.1% in June, compared to a 5.9% decline in June 2021. This is higher than the three-month average decline of 10.3%.
• The online non-food penetration rate fell from 43.3% in June 2021 to 39.4% in June.

Paul Martin, head of UK retail at KPMG, says: “Retail sales continued to fall for the third month in a row, although down just 1% from what was a June 2021 solid and in the context of unprecedented price increases on the main street. .

“Online shopping continued to trend in the opposite direction with total sales down 9%, with home-related non-food purchases such as furniture, appliances and IT suffering the biggest declines. online spending Jubilee weekend, which saw street parties across the UK, brought relief to food and drink retailers as sales rose nearly 1.5% year-on-year annually, despite rising costs for most items.

“As the cost of living crisis continues to deepen, retailers face a fine line between protecting margins and declining consumer confidence by passing on price increases while negotiating with their suppliers to share cost increases Cost and efficiency will dominate retailers’ agenda as they are forced to make tough decisions about which products end up on the shelves in order to stay competitive for consumers. forecasted hot and with many consumers choosing to vacation at home this summer, retailers are hoping the feel-good factor will start to improve some shoppers’ confidence – as overall confidence levels are currently lower than sales can suggest.

In May, UK inflation hit a 40-year high of 9%, with experts warning that clothing retailers will see falling demand as consumers focus on spending on basics.