Retail Sales Rise As Sunshine Boosts Spending

Total (LSE: 524773.L - news) retail sales were up 1.9% in July compared with a year ago, while like-for-like sales rose by 1.1%,, according to an industry survey.

Warmer weather and a "heavy month of promotions" boosted sales, defying expectations that shoppers would cut spending in the wake of the Brexit vote, the British Retail Consortium (BRC (Shanghai: 600466.SS - news) ) and KPMG survey found.

Fashion sales rose "markedly" in July compared to June, while the good weather prompted more picnics and barbeques, boosting food and drink sales.

Overall sales increased 1.1% between May and July, according to the research.

Helen Dickinson, chief executive of the BRC, said people were still spending because little had changed materially following the decision to leave the EU.

David McCorquodale, head of retail at KPMG, said sunnier weather had helped "blow away some of the post-referendum blues," and inspire shoppers to update their summer wardrobes.

"Sales of jewellery and watches also improved as international consumers took advantage of the weaker sterling to splash out on more expensive purchases," he said.

However, a separate report from Barclaycard found overall spending had dropped by 1%.

It found consumer spending growth fell to 2.6% in July, down from 3.6% in May and June.

But its data showed an increase in spending in pubs and restaurants, which may in part be due to the good weather.

The BRC also noted that retailers have prolonged summer discounts, and while July's hot spell has increased demand for food and clothing, the report should not be interpreted as a sign that consumer spending will remain resilient.

Its consumer confidence index showed a fall to its lowest point in three years at 106.6.

It stated that it will "take time for employers to adjust their staffing numbers and inflation to respond to sterling's recent depreciation, so 2017 likely will see the weakest period of consumer spending."