Grocers on slide as other retailers hold on

RECOVERING retail sales gave the high street a glimmer of hope yesterday after stores started their summer sales early to attract cautious consumers.

Retail sales volumes gained 0.7 per cent month-on-month in June, the Office for National Statistics (ONS) said.

While slightly ahead of analysts’ hopes, the growth only partly offset a 1.3 per cent decline the previous month.

Hide Ad
Hide Ad

However, there was bad news for the UK’s grocers, as food volumes plunged 4.2 per cent on the previous year, the largest fall since records began in 1988.

“The fall in (food) volumes in June is astonishing,” said analysts at Evolution Securities.

“Purchasing power is being impacted by falling disposable incomes, exacerbated by rapid inflation. These are the worst conditions we can recall seeing and new space only makes a bad situation worse.”

The ONS added food prices were up 5.8 per cent year-on-year – the highest since March 2009.

Hide Ad
Hide Ad

The overall retail growth was helped by retailers such as Marks & Spencer and other clothes chains starting their summer sales early, while home furnishing stores also put on big discounts.

Discounting helped household goods stores to increase their volumes by 2.6 per cent compared with the previous month, while clothes sales were up 0.6 per cent.

Stephen Robertson, director general of the British Retail Consortium, said retailers are “not out of the woods yet and more difficult months lie ahead”.

He added: “Spending on sale items brought forward to June is likely to leave a hole in July’s figures, which may also be dampened by the unseasonably wet weather.

Hide Ad
Hide Ad

“There are worrying signs that the food sector, so far the most resilient part of retail, has slowed a little. However early summer sales seem to have provided a badly needed boost for household goods, clothing and footwear.

“This is yet more evidence of the levels of discounting retailers are having to offer to tempt reluctant shoppers through their doors at a time of low consumer confidence and shrinking disposable income.”

The figures also revealed that non-store sales, including the internet, hit record highs, underlining the squeeze on the high street, consumers rein in spending in the face of fears over unemployment and the faltering economic recovery.