Consumers feel the pinch as retail sales growth slows

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Spending on non-food items relapsed into negative territory last month as consumers get to grips with higher costs of living and economic and political uncertainty

On a like-for-like basis, overall retail sales increased by 0.9% from July 2016, when they had increased 1.1% from the preceding year, according to the latest BRC-KPMG Retail Sales Monitor.

Over the three-months to July, non-food retail sales in the UK decreased by 0.7% on a like-for-like basis and by 0.4% on a total basis. 

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Online retail sales growth also slowed in July. Sales were up 8.3%, compared to 11.2% a year earlier.

BRC chief executive Helen Dickinson said: “The month’s growth was underpinned by food sales alone, while non-food sales relapsed into negative territory as the competition heats up over a shrinking pool of discretionary consumer spending power.

“Against a backdrop of increased consumer borrowing and shrinking real wages, we can expect food to continue making the running for sales growth for the time-being, although driven more by price than volume, with non-food continuing to struggle,” she added.

“The tough outlook for customers means that ensuring that prices remain low and choice and confidence remains high lies at the heart of what a fair Brexit for consumers looks like. So ensuring tariff-free trade with the EU must be the focus for Government as it resumes negotiations at the end of this month.”

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