Manufacturing, Retail and Distribution 09 August 2000

Low Prices Hit Sales Values

The British Retail Consortium-KPMG Sales Monitor for July recorded a slight weakening in retail sales growth. Like-for-like sales increased by 2.2% in the year to July, compared with 2.8% increase year-on-year in June. The rate of growth in total sales slowed from 5.2% in June to 4.7% in July.

The three-month trend rates of growth reduced from 6.8% to 5.2% for total sales, and from 4.3% to 2.7% for like-for-like sales.

  • Price deflation and poor weather during much of the month combined to dampen sales values.
  • Some retailers began their summer discounting earlier than last year; resulting in a boost to sales in June rather than July. Other retailers began their summer sales at the end of July, which will boost sales growth in August.

Bridget Rosewell, Chief Economic Adviser To BRC, Comments:-

"The position over the last three months shows that retail sales are growing at somewhat below the average rate for the last four to five years. At present there are no signs of either boom or slump in the figures and this supports the decision of the Monetary Policy Committee to keep interest rates on hold. If anything, these figures indicate a weakening in sales growth rather than the reverse."

Bill Moyes, BRC's New Director General, Comments:-

"These figures bear out recent survey evidence of reduced consumer confidence and lower consumer credit. Many retailers experienced a reasonable month in terms of customer footfall and volume of sales. However value of sales continued to be hit by discounting in an already deflationary environment."

The July Monitor covers four weeks from 2 to 29 July and provides the most up-to-date reflection of recent retail performance. The August Monitor will be published on 4 September, embargoed to 00.30 hours on 5 September.

The data is collected and collated for BRC by KPMG.

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