Consumer spending picks up in July

Trinity LeedsTrinity Leeds
Trinity Leeds
CONSUMER SPENDING picked up in July, defying signs that the economy is slowing down following Britain's vote to leave the European Union.

Two new surveys showed that far from people worrying about their future amid Brexit concerns, consumers spent more money last month.

The British Retail Consortium said UK retail sales rose 1.1 per cent on a like-for-like basis from July 2015 while total sales rose 1.9 per cent, which is the strongest growth since January.

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Helen Dickinson, ​c​hief ​e​xecutive​ of the BRC, said: “This month’s solid sales figures may come as a shock to some given the slew of early indicators suggesting that consumer activity was slowing in the wake of the referendum result.

​“​However, little has materially changed for most UK households in the wake of June 23, so it is not surprising to us that sales are simply responding to their normal underlying drivers.​“

​A​ survey from card company Visa UK​ showed that consumer spending rose 1.6 per​ ​cent in July compared with a year ago, up from June’s 0.9 per​ ​cent increase and the biggest rise in three months.​

However the BRC said that July sales were driven by a heavy month of promotions ​which​ proved very successful in appealing to bargain-hungry shoppers​.

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“The big question for retailers is whether that success can be carried forward into full price sales​,” said Ms Dickinson​.

​“​Whilst retailers continue to monitor the situation in the wake of Brexit, responding to rapid and complex change in consumer behaviour in the midst of a highly competitive market remains the substantive challenge.”

It appears that the feel-good factor was also felt in Yorkshire.

David Maddison, general manager at Trinity Leeds shopping centre, said: “July has been a strong month for Trinity Leeds, in particular our high street fashion stores have come into their own as the warm weather has seen our customers stock up on the latest summer trends ready for the sunshine at home or vacations abroad.

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“Our restaurants also find themselves in top form as the unique offering of Trinity Kitchen and dining beneath the iconic dome of the centre continue to draw people far and wide.”

David McCorquodale, head of retail at KPMG, also said the warm weather was a factor: “The sun shone down on retail fortunes in July with total sales increasing 1.9 per cent versus 2015. Warmer weather helped blow away some of the post-referendum blues, boosting the UK feel good factor and giving consumers a sense that ‘life goes on’ following the initial shock of the Brexit vote.

“The July heatwave put picnics and barbecues high on the agenda lifting sales of food and drink back into the black.”

He said that fashion sales improved markedly versus June as well timed promotions, holiday preparations and some sunshine prompted consumers to supplement their summer wardrobes. Sales of jewellery and watches also improved as international consumers took advantage of the weaker sterling to splash out on more expensive purchases.

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“This first full month of retail sales figures post-vote suggests that UK shopping patterns haven’t changed versus previous years. For retailers, plans to improve productivity remain top of mind to guard against recent increases to their cost base as well as making sure they can weather what are likely to be more uncertain times ahead,” he said.

Visa said ​seasonally-adjusted spending increased by 1.1 per cent in July, the strongest month-on-month gain since January.