(Sharecast News) – Heavy rain and high inflation hit UK retail sales in July, forcing firms to cut prices, a survey showed on Tuesday.
The British Retail Consortium (BRC)/KPMG monthly survey said retail sales values rose 1.5% year on year, compared with the 12-month average growth rate of 3.9%. Retailers have been forced to increase promotions in an attempt to get price-conscious customers through the door.
Clothing and footwear retailers reported a fall in sales during what is normally a bumper season for them,, contributing to a 0.5% fall in overall non-food sales in the three months to July.
Food and drinks sales grew at their slowest pace since the winter, also partly due to last month’s heavy rain.
“We are starting to see a big rise in the number of promotions that retailers are putting in place in order to get shoppers through the door, as they battle to keep market share,” said Paul Martin, KPMG’s head of retail.
“Price conscious consumers are shopping more carefully, more aware of where bargains can be found and what they are getting for their money – which is biting hard into retail margins and profitability. UK consumers have been hugely resilient throughout the cost of living crisis but stubbornly high inflation coupled with rapidly rising interest rates will test their ability and willingness to keep on spending for the rest of this year.”
Reporting by Frank Prenesti for Sharecast.com