UK retail sales slowed by food decline, BRC-KPMG finds

(ShareCast News) - A decline in food sales led to a slowing in UK retail sales growth in July, although the BRC-KPMG retail sales monitor increased more than was predicted.With strong non-food sales offsetting a negative performance from food, like-for-like sales in July rose 1.2% year-on-year, ahead of estimates of a 1% rise but down from 1.8% in June.LFL food sales were down 1.6% in the three month period, with strong performances from furniture, home accessories and house textiles helping non-food up 3.2% for an overall quarterly retail sales growth of 1.0%.In the clothing segments, ladieswear had a disappointing month, though accessories, kidswear and summer footwear enjoyed strong sales.The British Retail Consortium and advisory group KMPG's monthly survey revealed total sales were up 2.2%, or if adjusted for the deflation, total growth was 3.6%."Interestingly, of all categories covered by our monitor, total food sales were the worst performing, recording a fall for the first time this year," said BRC director general Helen Dickinson.However online non-food sales rose by 14.7%, against a 14% comparative.Food and drink sales are particularly influenced by the weather at this time of year, explained Joanne Denney-Finch, chief executive of food research specialists IGD."July began with a heatwave and strong food sales but the rest of the month was colder and wetter than average and July's overall performance disappointed after a run of more encouraging months."Analysts at Shore Capital highlighted a tough month for the grocers and concern for the rag trade from the ladieswear numbers."From this data-point we have to retain some caution on the supermarkets in the UK. Deflation and price competition are ?dampening top-lines and gross margins," they wrote."Whilst the grocers toil we sense that fashion retailers will also have some woes with what the BRC-KPMG characterises as surprisingly weak ladieswear sales albeit, as outlined above, accessories, footwear and kidswear are stronger."