June sales find consumers making hay while sun shines

Retail enjoyed a better June than last year, as sales responded to a consistently sunny month.

According to the retail sales monitor, produced by the British Retail Consortium (BRC) and professional services provider KPMG, sales values last month rose by 1.2% on a like-for-like basis - which strips out the impact of any stores which have opened or closed in the intervening 12 months - in comparison to June 2009.

This comes despite the fact that a heatwave in the second half of June 2009 had boosted sales by 1.4% over the same month in 2008. While temperatures did not hit the same highs this June, they were more consistent over the whole month.

Growth in food sales were put down to the effect of both the good weather and the World Cup - factors which also accounted respectively for strong sales of TVs and outdoor DIY and leisure, though clothing and footwear sales slowed. Meanwhile, non-food internet, mail-order or phone sales were almost 17% up on last year.

Overall, sales were up by 3.4% against a 3.2% increase in June 2009.

BRC director-general Stephen Robertson said that this year's increase was particularly impressive given the strong performance of sales in June last year, emphasising the part that earlier summer clearances had played in the figures - and suggesting that there was an element of people making hay while the sun shined.

"Most of the time, minds were outdoors," he added.

"Homewares and indoor DIY lost out. Garden goods did better. Summer clothing sold less well than the weather might suggest because many people had bought when the sun first arrived in May.

"The Budget is affecting confidence but it won't be until the impact of the measures is actually felt that it really hits spending."

KPMG head of retail Helen Dickinson described the sales as "trundling along", adding that while the delayed introduction of the VAT rise to 20% - set for 4 January - had not impacted upon spending yet, "the effect of the wider fiscal tightening measures on consumer spending remains to be seen".

Last week, the BRC-Nielsen shop price index found that inflation in the sector was continuing to fall, leading BRC director-general Stephen Robertson to declare that "the era of shop price volatility seems over for now".

Retail jobs 'micro-boom'

Meanwhile, the number of unemployed people in the UK fell by 34,000 in the three months to May, according to official figures.

The Office for National Statistics also shows that the period saw 160,000 extra people finding a job - though the vast majority of this number came from part-time workers, with just 12,000 finding full-time work.

Nevertheless, Antony Wroe, sales and retail specialist from the Recruitment and Employment Confederation told retailmoves.com that the industry was in the middle of a "micro-boom", due to an upswing in consumer confidence, particularly for minor purchases.

While warning that it could be the "calm before the storm" of the VAT rate increase, he said: "This is having a knock-on effect with retail recruitment, and as you'd expect, most of the positions are temporary which helps explain the ONS figures."

IMAGE AP Photo/Manish Swarup

Whatever the weather throws at you, take the risk out of your retail by insuring your shop with MORE TH>N. Ask us for a cheap shop insurance quote today!