Shop sales rise against weak comparison
09/08/2006
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Retail sales picked up on the high streets last month thanks to heavy discounting and warm temperatures, but the rise comes against a weak comparison in 2005, according to analysts.
New figures from the British Retail Consortium (BRC) show that shop sales rose 3.4% on the year in July.
However, the group cautioned that the increase is compared against a 1.9% drop in sales from July last year, when shopper numbers plunged after the London terror attacks.
Still, heavy discounting in certain sectors helped boost figures at the tills. Clothing did well in clearance sales, the BRC said, but homewares and indoor products suffered due to the heatwave.
The heat also reduced footfall but provided a boost for the food, drink and outdoor living sectors.
“The growth in total and like-for-like sales in July continues the trend we have seen in the last couple of months with discounting activity negating lower shopper numbers and driving positive gains in the comparisons to 2005,” said Helen Dickinson, head of retail at KPMG.
“They say last month was the hottest July on record and, for once, the warm weather coincided with the timing of seasonal promotions, thus ensuring that the clothing sector showed some positive gains.
“Once again, however it, was our desire for food and drink that was the driving force behind the overall results.”
The survey also found that the three-month trend rate of growth fell to 3.1% from 4.1% in June on like-for-like sales, and to 5.6% from 6.8% for total sales, reflecting the continued growth of retail space.
Overall, consumer confidence remains weak, the BRC said, and underlying trade remains tough. Although shoppers are keen to take advantage of clearance promotions and discounts, the BRC said they are still reluctant to commit to larger purchases.
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