July 10, 2018
World Cup fever and the continued warm weather have given retailers something to smile about as sales in June rose for a second month.
As the high street struggles to make way amid fierce competition from online and stagnant household income, the latest figures from the British Retail Consortium (BRC) and KPMG showed that total retail sales rose by 2.3% from the same month last year across the UK.
The boost, mainly driven by beer, barbecues and big-screen TVs, comes after one of the best months in recent years in May, which coincided with rising temperatures and a celebratory atmosphere off the back of the royal wedding.
Food and drink seem to be the big beneficiaries, growing over the three months to June on a like-for-like and total basis, while in-store non-food items over the same period declined 1.4% on a total and almost double that on a like-for-like basis.
Suggesting deep problems in the sector, the BRC and KPMG cautioned retailers not to rely on the current “feel-good” mood.
BRC chief executive Helen Dickinson warned: “With household incomes still barely growing faster than inflation, conditions for consumers and retailers remain extremely tough. And things could get tougher. Once the euphoria of sporting success subsides, without a deal on Brexit, shoppers face the prospect of significant price increases and shortages of everyday goods.
“Even if England do go all the way, households may have little to celebrate come next April.”
Information technology firm Fujitsu also urged retailers not to rely on seasonal factors to overcome a difficult trading environment with inflation and low-wage growth threatening spending in the long-term.
Investing in technology to offer a more appealing shopper experience is key to surviving and overcoming the deep obstacles physical stores face today.
“In our own research, we’ve found that eight out of 10 consumers would actually spend more with retailers that have a better technology offering,” said Adrian West, director of commercial sector at Fujitsu UK.
“This represents a huge opportunity for retailers to tap into the two key drivers of 21st century retail spending – convenience and experience. Many consumers now prioritise flexibility over cost, especially as they’ve become accustomed to services such as Amazon and Uber that wrap around their needs.
“That’s why retailers must be visionary in their use of tech and give shoppers what they want, when they want it.”
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