BRC – too early to say Brexit effect on retail

Two major players, the British Retail Consortium and accountancy firm KPMG, have said that it is still “too early to assess any Brexit impact on retail sales”.

The BRC-KPMG Retail Sales Monitor June 2016 covers the five weeks from 29 May to the 2 July was published today. It found that UK retail sales decreased by 0.5% on a like for like basis from June 15. It had increased by 1.8% from June 14 – June 15. On a total basis, sales rose by 0.2% against a 2.9% increase in June 2015.

Helen Dickinson, BRC’s Chief Executive, commented, “Retail sales grew in June, albeit with total growth slowing to 0.2 per cent. While sales did slow towards the end of the month, it is too early to define this as a trend. The month outturn was predominantly driven by a decline in sales in the fashion categories and isn’t a surprise given that June 2015 saw record growth in clothing and footwear. Looking across the last three months, food has held its ground with a better performance than non-food sales, which has seen its lowest growth since April 2012, largely due to fashion combined with a slowdown in furniture.”

Focusing on the Brexit issue, Dickinson added, “Britain’s retailers remain open for business. The EU referendum vote has not changed their relentless pursuit of delivering for customers day in, day out or their investment in meeting the needs of fundamental changes in the way people shop, driven by digital and technology.

“Despite the fall in the pound, the time it takes for any input price increases to translate into higher shop prices will depend on a combination of factors including further changes in the pound, commodity prices and the challenge for retailers to move pricing given the intensity of competition. So, there won’t be any instant shocks as any changes would take time to feed through.”

David McCorquodale, Head of Retail, KPMG, added, “While the ramifications from the Brexit vote may well affect consumer confidence, retailers will be hoping the long-promised heatwave and potential stay at home holidays will be enough to drive shoppers back to the high-streets over the months ahead.”