The British retail landscape is witnessing a surge in promotional efforts as retailers strive to invigorate consumer spending, following a decline in sales of clothing and shoes in July, attributed to unfavorable weather conditions.
Typically a bustling month for fashion, July’s inclement weather deterred consumers from replenishing their summer wardrobes, consequently impacting sales of apparel and other seasonal items.
A report on retail sales highlighted a notable uptick in promotional activities aimed at enticing shoppers back to stores. The combination of a costlier living environment and escalating interest rates has led to a constriction in consumer spending.
Paul Martin, UK Head of Retail at KPMG, noted, “Retailers are increasingly deploying promotional strategies to attract footfall and safeguard their market share. Cognizant of price sensitivity, consumers are adopting a more discerning shopping approach, seeking value and transparency in their purchases.”
According to the British Retail Consortium (BRC) and KPMG, retail sales in July exhibited a 1.5% increase in value compared to the previous year. However, when factoring in inflation, which currently stands at 7.9%, actual sales volumes were lower.
Unfavorable weather conditions not only impacted High Street stores but also extended to the digital realm, with online sales witnessing a nearly 7% year-on-year decline, as reported in the study.
Despite the overall challenges, sales of furniture, health, and beauty products demonstrated resilience.
Helen Dickinson, CEO of the BRC, observed, “Although consumer confidence is gradually improving, it remains below long-term benchmarks.” The lingering effects of inflation — the rise in prices — have driven consumers and retailers to operate within more constrained parameters as market conditions persist in their complexity.
Inflation experienced a decrease in June, down to 7.9%, signifying its lowest level in over a year, mainly attributed to diminishing energy bills and moderating food prices, as indicated by official data from the Office for National Statistics (ONS).
While the BRC-KPMG retail data provides a more limited perspective compared to the ONS figures, reports of amplified summer discounts hint at potential implications for inflation when the July data is formally unveiled in the coming week.
Economists are anticipating a drop in inflation to 6.8% due to declining energy prices, which will be revealed when the updated statistics are released.
