British retailers said activity picked up in June as rising prices forced consumers to pay more for food and warmer weather spurred purchases of leisure items from swim wear to barbecues.
The British Retail Consortium said its measure of like-for-like sales grew 4.2% from a year ago in June after, quicker than the 3.7% pace of expansion recorded in May. Food sales jumped 9.8% in the second quarter while other goods increased just 0.3%.
“Sun-seekers headed to their favorite retailers to buy swim wear and beach towels, and outdoor games, garden furniture and barbecue food were boosted as families came together to celebrate Father’s Day,” said Helen Dickinson, chief executive officer of the BRC, said in report Tuesday. “People were much more cautious about big-ticket purchases like furniture and technology equipment.”
The figures shed light on the health of consumer spending ahead of reports on economic growth and inflation in the next two weeks that will help the Bank of England determine how much more it needs to raise interest rates. Official government data on retail sales is due on July 21.
Policy makers are concerned that prices are rising more than four times faster than their 2% target, leaving many people paying more to buy fewer goods.
- Total sales grew 4.9%, a marked improvement from the 1% decline in the same month a year ago.
- Sales declines were recorded for other non-food items, home accessories, house textiles, toys and baby equipment, jewelery and watches, and stationery.
- Because food inflation remains high, “there will be a negative impact on consumers’ ability to spend on non-essential food items,” said Paul Martin, head of retail for KMPG, which contributed to the report.
