Retail sales grow at slowest pace on record

British retail sales advanced at the slowest average pace on record in the last twelve months as Brexit-related concerns continued to weigh on consumer spending.

Average sales growth slowed to just 0.6% over the year ending 30 June, according to the British Retail Consortium, the slowest increase since the industry group began recording figures back in 1995.

Retailers also saw the largest annual fall for the month of June - down 1.3% - as Brexit concerns mounted even as the UK waited for a new Prime Minister to be named, with the boost to spending last year from the heatwave and the World Cup making for tough comparatives.

BRC chief executive Helen Dickinson said: "Overall, the picture is bleak: rising real wages have failed to translate into higher spending as ongoing Brexit uncertainty led consumers to put off non-essential purchases.

"The continued risk of a no-deal Brexit is harming consumer confidence and forcing retailers to spend hundreds of millions of pounds putting in place mitigations."

In like-for-like terms, sales fell 1.6% on the year, while the 12-month average fell 0.1% for its weakest reading in more than seven years.

The report also indicated that issues were principally concentrated around non-food stores, whose sales dropped by 4.3% in the second quarter and by 2.8% year-on-year.

BRC's data also revealed that in excess of 30% of non-food items were bought online, with the digital penetration rate rising from 28.5% to 30.7% between June 2018 and June 2019.

But Samuel Tombs at Pantheon Macroeconomics was more upbeat, pointing out how wage growth hit an 11-year high in April, the increase - the biggest in five years - in the personal allowance at the start of the tax year and above average consumer confidence.

"None of these developments suggest that a downturn in consumers’ spending is imminent."