“On the surface, this month’s ONS figures appear encouraging with sales volumes increasing by 4.0% over the same period in 2015 - the 27th consecutive month of year-on-year growth. However, compared to last month’s numbers, the quantity bought fell 0.2% and all store types saw a decrease in average store price compared with June 2014.
“In particular, food retailers continue to feel the effects of the “race to the bottom” and falling prices across the board. Despite a 1.9% rise in the quantity bought, perpetual discounting continues to put pressure on grocers who saw the scales tipped back with a 1.9% decrease in the average store price.
“Happily, sales of clothes and shoes were buoyed by the glorious June weather with a 6.2% increase in the amount of goods sold compared to the same period in 2014. The statistics also paint a positive picture of online growth with e-sales increasing 11.4% versus June 2014. With scorching temperatures discouraging consumers from dashing through the high-street, many chose to browse virtual stores instead to bag a summer bargain.
“Following the Summer Budget, many will be looking to see how the Chancellor’s announcements of a National Living Wage and changes to Sunday trading hours in England will impact sales. Added to this, a potential interest rate rise before the end of the year may create further uncertainties. However, with average disposable income on the rise consumer spending remains strong and retailers will be hoping the summer feel good factor will continue to boost consumer confidence helping to combat pressures of falling average in-store prices.”
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Jess Liebmann, KPMG Corporate Communications
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KPMG LLP, a UK limited liability partnership, operates from 22 offices across the UK with approximately 12,000 partners and staff. The UK firm recorded a turnover of £1.9 billion in the year ended September 2014. KPMG is a global network of professional firms providing Audit, Tax, and Advisory services. It operates in 155 countries and has 162,000 professionals working in member firms around the world. The independent member firms of the KPMG network are affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity. Each KPMG firm is a legally distinct and separate entity and describes itself as such.
This article represents the views of the author only, and does not necessarily represent the views or professional advice of KPMG in the UK.