People Spending But Less Confident

The value of sales on the High Street during April fell 2.3% on a like-for-like basis and 0.2% on a total basis according to the British Retail Consortium's Retail Sales Monitor. Over the three months from February to April food sales increased 0.9%, non-food 2.1% and all categories 1.6% on a like-for-like basis. On a total basis food increased by 2.9%, non-food by 4.4% and all categories by 3.8%. Non-food non-store sales, which include the Internet, mail order and telesales, were 15% up in April on last year but used more promotions to maintain sales.

Fresh Foods Help Keep Price Inflation Down

The British Retail Consortium (BRC) Shop Price Index (SPI) produced in collaboration with Nielsen reported annual inflation of 0.7% in June. It is down from 1.3% in May. The slowdown has continued since March. Food was the main driver with annual inflation of 5.6% from 6.4% in May. Fresh foods and particularly dairy products and some meats were largely responsible. Consumers will be seeing savings on their supermarket bills. Non-foods were up from 1.3% to 1.9%.

The month-on-month basis reported a prices increase of 0.2% in June compared with 0.5% in May. The increase in unemployment is affecting consumer confidence. Discounts and promotions are being offered at the expense of margins. Shopping conditions such as good weather help shoppers take advantage of promotional offers. The BRC maintain that the SPI is a more reliable indicator of shop price inflation than the RPI produced by the ONS.