Retail sales across the UK were subdued last month, according to a report released on Tuesday by the British Retail Consortium (BRC).
The latest BRC-KPMG Retail Sales Monitor shows that like-for-like sales rose by just 0.1% compared with July 2011, following a 1.4% increase in June. On a total basis retail sales were up 2.0%, after a 3.5% rise in June.
As in previous months online sales continued to show robust growth. In July online sales (including mail-order and phone sales) of non-food items increased by 15.6%, the strongest growth seen this year. There is evidence that click-and-collect services are growing in popularity, the BRC said.
The BRC also reported that competition is fierce among online retailers and competitors have been cutting into their margins to attract business.
For the first time since May 2010, non-food sales outpaced food sales. According to the report this growth was driven by an increase in sales of clothing and footwear and toiletries and cosmetics.
It was notable that the arrival of cooler weather coincided with the autumn clothing and footwear ranges reaching the shops and Stephen Robertson, BRC director general, said that shoppers took the chance to refresh their wardrobes with items they could make use of straightaway. Some retailers also benefited from the longer Sunday opening hours brought in for the Olympic period.
Discretionary and big-ticket items continued to struggle last month, with sales growth promotion-driven, Robertson added.
Over the coming months Helen Dickinson, head of Retail at KPMG, foresees little change from the lacklustre performance seen in July, with the ongoing effects of unseasonal weather combining with a continued squeeze on disposable incomes and any benefit from the Olympic Games expected to be short lived. She concluded by saying that retailers face a real challenge to grow sales and many are only achieving this at the expense of margins.