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UK retail sales growth slowed in June, with a 0.5 per cent fall on a like-for-like basis, according to the latest British Retail Consortium-KPMG survey.
Sales slowed in the last week of the month after the June 23 Brexit vote, but the BRC said it is “too early to define this as a trend.”
The slowdown comes shortly after GfK’s consumer confidence barometer showed a steep fall in confidence after last month’s Brexit vote.
Total UK retail sales rose 1.2 per cent on a 12-month average basis, the lowest 12-month average since May 2009.
Wet weather contributed to a decline in fashion sales, while food sales held up better than non-food with a boost from the European football championships.
Joanne Denney-Finch, chief executive of food market intelligence group IGD, said:
The surprise result of the referendum appeared to trigger an immediate drop in food and drink spending, which more than offset some modest sales growth earlier in the month. Hopefully, this will prove to be a short-lived shock and calmer waters lie ahead.
In-store sales fell 1.9 per cent over the three months to June, and 2.2 per cent on a like-for like basis, the steepest decline since the start of BRC-KPMG’s online sales monitor in December 2012.
Online sales grew by 9 per cent, compared to annual growth of 17.6 per cent the previous year.
David McCoquodale, KPMG head of retail, said:
While the ramifications from the Brexit vote may well affect consumer confidence, retailers will be hoping the long-promised heatwave and potential stay at home holidays will be enough to drive shoppers back to the high-streets over the months ahead
Helen Dickinson, BRC chief executive, said customers should not expect any sudden price increases after the sterling’s recent falls:
Britain’s retailers remain open for business. The EU referendum vote has not changed their relentless pursuit of delivering for customers day in, day out or their investment in meeting the needs of fundamental changes in the way people shop, driven by digital and technology.
Despite the fall in the pound, the time it takes for any input price increases to translate into higher shop prices will depend on a combination of factors including further changes in the pound, commodity prices and the challenge for retailers to move pricing given the intensity of competition. So, there won’t be any instant shocks as any changes would take time to feed through.