Retail sales saw the fastest July growth in seven years thanks to the hot weather, according to the British Retail Consortium (BRC).
The BRC said that sales are up 2.2% on last year, with consumers spending money on swimwear, sun cream, sandals, barbecue food and beer. After a slow April due to the cold start to spring, July was the third consecutive month of improving retail figures.
These July figures are the best since the heatwave of 2006. David McCorquodale, head of retail at KPMG, who compiled figures said:
“July was a golden month for retail sales and marks a return to form for British retailers.
"Hopefully this uptick in sales is another indication that the UK economy has turned the corner towards growth.”
The BRC said that this “very solid” performance was driven by deep discounts and offers, as well as a “feel-good factor” resulting from the combination of good weather, a royal baby and a British Wimbledon champion. BRC director general Helen Dickinson commented:
“While we know that the picture is still variable and the High Street in particular continues to face considerable challenges, these positive results will be welcomed in town centres around the country that depend so much on retailers performing well.”
However, the hot weather hasn’t proved to be good news for everyone. Online sales only grew by 7.9% (which is relatively low for this sector) as people stepped away from their computers and out into the high street. Book sales were also down on last year, which the BRC puts down to the lack of a summer blockbuster like last year’s “Fifty Shades of Grey”. The baking chain Greggs also suffered, blaming the hot weather for a 3.2% drop in like-for-like sales in the five weeks to August.
Howard Archer, chief UK and European economist at IHS Global Insight warned that, although these figures are promising, the UK economy is not yet out of the woods:
“Markedly improved consumer confidence and elevated employment currently seems to be underpinning decent retail sales, despite the squeeze on purchasing power coming from inflation running well above inflation,”
“Even so, uncertainty persists as to whether consumers will be able or willing to keep spending at a decent rate in the near term at least while their purchasing power is being squeezed by inflation running appreciably higher than earnings growth.”