High street woes: drop in sales ‘not seen since depths of pandemic’

Figures just released by the BRC-KPMG Retail Sales Monitor reveal a scene of plummeting high street sales, down 1.3 per cent on a like-for-like basis from June 2021, when they had increased 6.7 per cent. This was above the 3-month average decline of 1.5 per cent and below the 12-month average growth of one per cent.

On a total basis, sales decreased by one per cent in June, against an increase of 10.4 percent last year. Over the three months to June, Food sales increased 2.2 per cent on a total basis (1.6 per cent on a like-for-like basis). This is above the 12-month Total average growth of 0.6 per cent, and for the month of June, food was in growth year-on-year.

Over the last quarter, non-food retail sales decreased by 3.3 per cent on a total basis and 4.2 per cent like-for-like, below the 12-month total average growth of 5.0 per cent. For the month of June, non-food was in decline year-on-year.

Online non-food sales decreased by 9.1 per cent in June, against a decline of 5.9 per cent in June 2021. This is above the three-month average decline of 10.3 per cent, and non-food online penetration rate decreased from 43.3 per cent last year to 39.4 per cent.

“Sales volumes are falling to a rate not seen since the depths of the pandemic, as inflation continues to bite, and households cut back spending,” said Helen Dickinson OBE, Chief Executive of the British Retail Consortium (BRC). “Discretionary purchases were hit hard, especially white goods and homeware, while consumers also traded down to cheaper brands in food and non-food alike. While the Jubilee weekend gave food sales a temporary boost, and fashion sales benefited from the summer holiday and wedding season, this was not enough to counter the substantial slowdown in consumer spending.”

Dickinson commented on the cost-of-living dilemma for store-owners: “Retailers are caught between significant rising costs in their supply chains and protecting their customers from price rises,” she said. “The government needs to get creative and find ways to help relieve some of this cost pressure – the upcoming consultation on transitional relief is a golden opportunity to ensure that retailers aren’t overpaying on their business rates bills.”

IGD CEO Susan Barratt observed that “IGD’s Shopper Confidence Index reached a new record low in June as shoppers contend with the cost-of-living crisis. We’re forecasting that food inflation will reach 15 per cent this summer and our ShopperVista research shows that shoppers are increasingly trying to save money in every part of their lives. Unsurprisingly, shopping habits are changing; some 60 per cent of shoppers are now spending time to save money, up from 55 per cent in March.”

Meanwhile Paul Martin, UK Head of Retail at KPMG, tempered optimism with caution. “With a long run of hot weather predicted and many consumers choosing to holiday at home this summer, retailers will be hoping that the feel-good factor begins to improve confidence amongst some shoppers – as presently overall confidence levels are lower than sales may suggest,” he said.