Food and drink sales soar in the UK
Food and drink sales in the UK rose at their fastest rate for three years during the July heatwave, it emerged today.
The British Retail Consortium (BRC) said strong demand for picnic food, drinks and fruit ensured sales for the whole of the UK retail sector rose 3.4% in July on a like-for-like basis and by 6.1% when all floorspace is included.
Clothing also did well because of clearance sales but overall footfall numbers were lower, leading to reduced sales of homeware and indoor products.
Like-for-like growth for the period between May and July showed a rise of 3.1%, but BRC director general Kevin Hawkins noted the figures were helped by comparisons to a weak 2005, while many retail sectors struggled.
The Bank of England’s Monetary Policy Committee (MPC) increased interest rates to 4.75% last week, adding that there appeared to have been a post-Christmas recovery in household spending.
But Mr Hawkins said: “Talk of a general upturn in consumer spending is wide of the mark – even more so since the MPC increased interest rates.”
The breakdown of the BRC figures for July revealed the strongest growth in food and drink sales since summer 2003, when the weather was also hot.
Home accessories sales remained sluggish while trading for those selling furniture and carpets worsened further, continuing the slowdown from the discount-driven gains seen since April.
Carpetright highlighted the downturn earlier today when it blamed hot weather in June and July for a 0.3% decline in like-for-like sales in the UK and Ireland over the first 13 weeks of the financial year. Moss Bros also reported lower sales because of the World Cup and the weather.
While the BRC said overall clothing sales were up in July, it added that sales of formal suits and jackets struggled.
HSBC economist John Butler said the retail sector appeared to be in robust shape.
He added: “The real question going forward is how will the consumer respond if the financial markets are right and interest rates rise a further 0.5%?”
