UK retail sales slide in June as clothing drags

UK retail sales growth slowed to just 0.2% in June, with like-for-like sales dropping 0.5% compared to the same month last year, according to the retail sales monitor survey from the British Retail Consortium and KPMG.

A decline in clothing and shoe sales was the biggest drag on the sector, dragging non-food sales growth to lowest level since April 2012, outweighing improvements in food sales.

Sales slowed in the last week of the month after the 23 June vote to leave the EU, but the BRC argued it was “too early to define this as a trend”.

KPMG head of retail David McCorquodale 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.”

However, a rival survey from Nielsen on Monday indicated more than half of consumers were planning on cutting spending on new clothes and some other discretionary spending, as well as looking for cheaper grocery options.

On a three-month basis, the BRC-KPMG survey found total UK retail sales rose 0.5%, and 1.2% on a 12-month average basis, which is the lowest 12-month average since May 2009.

Food sales increased 0.8% on a three-month basis, the best performance by grocers since March 2015, with the 12-month average remaining positive at 0.1%.

“The surprise result of the referendum appeared to trigger an immediate drop in food and drink spending, which more than offset some modest sales growth earlier in the month," noted Joanne Denney-Finch, chief executive of IGD.

"Hopefully, this will prove to be a short-lived shock and calmer waters lie ahead.”

Non-food sales rose 0.3%, the lowest since April 2012 and taking the 12-month average to 2.1%, its lowest level since June 2013.