Blog: Gloomy July casts cloud over Christmas

Leonie Barrie | 10 August 2010

While hardly a cause for celebration, this-morning’s figures from the British Retail Consortium suggest UK spending is continuing to hold up, at least until the effects of government austerity measures begin to hit peoples’ pockets. The figures point to a 2.6% rise in total retail sales in July – or a lift of just 0.5% on last July on a like-for-like basis.

Closer inspection of the numbers, though, suggests a more worrying trend – at least for the clothing and footwear sector. Most of the month’s growth is driven by higher food prices, while non-food continues to struggle.

Without giving details, the BRC said clothing sales growth was boosted by promotional deals, but trading in footwear was more difficult. And summer sales, some of which started earlier this year, did little to entice consumers back in any decisive way.

If this is the picture painted before the government’s comprehensive spending review in October, then retailers should be bracing themselves for a very tough run-up indeed to the all-important holiday trading period.