- FashionUnited |
The combination of rising interest rates and poor weather hit UK retail sales in July, particularly for clothing retailers. The monthly BRC/KPMG retail sales monitor shows retail sales in July increased by 1.8 per cent on a like-for-like basis, with total growth of 4.3 per cent compared to a year earlier. The three-month trend saw the like-for-like rate of growth edge down from 2.7 per cent in June to 2.6 per cent in July for sales, with total sales growth down from 5.4 per cent to 5.3 per cent.
Helen Dickinson, acting head of retail, at KPMG said: "Retail sales improved as the month progressed, to end showing a 1.8 per cent increase on a like for like basis compared to July 2003. There was some deep discounting to clear old stocks, and this came at a cost to margin. Clothing fared worst, bordering on negative like-for-like territory.
"Overall like-for-likes for the year to date have averaged just over 2 per cent. However as we move into August, which is one of the quieter trading months, confidence looks fragile and the average rate may continue to fall. The latest interest rate rise may finally begin to bite and, if the weather holds up, the clothing retailers may wish they hadn't cleared all their summer stock at highly discounted rates."
Clothing sales were hit by the rain in the first week of July in particular, but recovered later in the month, helped by hot sun and the summer sales. Womenswear performed better than menswear, which relied on price cuts helped to clear stocks. "The Monetary Policy Committee's desire to target house prices is already having unnecessary and unwanted consequences on the high street. It needs to refrain from any further rises unless it wants to