Retail sales cool as warm weather boost fades

Retail sales cooled last month as buoyant spending on food and drink spurred by the warm weather failed to offset a wider slowdown in consumer expenditure.

Figures from the British Retail Consortium (BRC)-KPMG sales monitor showed that in July, retail sales increased by 0.5% on a like-for-like basis compared to the same month in 2017.

This compares to a rise of 1.1% in June, when beer, barbecues and big TVs lifted sales as the warm weather and World Cup fever delivered a fillip to a beleaguered sector.

Total sales also dipped, falling from 2.3% in June to 1.6%, despite food sales having their best July in five years.

Fans and cooling equipment also flew off the shelves, but categories such as furniture, computing and footwear all logged declines.

Helen Dickinson, chief executive at BRC, said: "Last month's sweltering temperatures kept shoppers focused on eating, drinking and keeping cool.

"Food sales had their best July in five years, while fans and cooling equipment flew off the shelves.

"However, total sales growth slowed as the heat laid bare the underlying weakness in consumer spending.

"Sales of non-food products struggled, three months into an extended period of summer weather, demand for many seasonal purchases has slowed while the heat has kept shoppers away from days spent browsing new ranges.

"For many in the industry, autumn could not come sooner."

A separate survey by Barclaycard showed that consumer spending rose 5% per cent year-on-year in July, capping the strongest three-month period since 2014.

Essential spending climbed 8.7% in July, driven by a strong rise in supermarkets of 6.7%.

England's World Cup performance helped lift pub spending by 16.8% in July, the biggest increase since April last year, according to Barclaycard.

Overall, consumers spent 41% more in pubs on England match days than on the equivalent days in 2017, rising to 73% on the day of the England vs Croatia semi-final.

However, Barclaycard director Esme Harwood cautioned: "It will be interesting to see if this strong level of growth continues as we move into the final stretch of summer.

"It's clear that some consumers remain cautious about what's to come with interest rates rising and overall confidence in household finances down slightly from June."