The London Olympics failed to boost UK retail sales as hoped last month with households preferring to watch the games rather than go shopping, giving stores one of their worst months of 2012, the British Retail Consortium said today.
BRC-KPMG Retail Sales Monitor showed that like-for-like retail sales fell by 0.4% in value terms compared with August 2011, following a 0.1% increase in July. On a total basis, sales were up 1.6%, against a 1.5% rise in August 2011, although this was also a slowdown after a 2.0% climb in July this year.
Excluding the Easter anomaly, the figures were both the lowest since November 2011, driven by particularly weak non-food sales as the feelgood factor from the Olympics failed to inspire spending. The BRC said that there was a mild boost to food sales in the form of party food and drink, but the net effect of the Games was minimal as lower footfall in London was offset by a better performance in the rest of the country.
The most noticeable impact from the Olympics was felt online which saw growth of just 4.8% in August – the lowest since the Monitor started collecting data on this in October 2008.
Stephen Robertson, Director General of the BRC, commented: “It’s clear people were absorbed by the magnificent Olympics and had little interest in shopping, especially for major items. Usually-reliable online sales suffered, putting in the worst sales growth since we started the measure four years ago. Some retailers told us online activity was particularly thin in the evenings. If people weren’t watching television they were more likely to be following the sport on PCs and mobile devices than shopping.
“As summer gives way to the all-important Christmas run-up, retailers will be hoping sales that didn’t happen in August have been postponed and not lost entirely.”
Commenting on the Food & Drink sector, Joanne Denney-Finch, Chief Executive, IGD, said: “August’s food and grocery sales improved slightly compared with the previous month. Team GB’s Olympic success may have provided a mild boost, but it was the sunshine that had more impact: sales peaked in the third week of the month, as the weather improved.
“While the nation continues to enjoy the feelgood factor into the Paralympics, shoppers are still keeping a careful watch on their finances. Nearly two-thirds (63%) of them tell us they are looking more closely at the price of products before deciding what to buy, since the beginning of the year.”
The BRC's findings tally with other recent surveys and retailers' reports, showing that consumers were in no mood for a spending spree during the Olympics. The weak retail sales dent expectations that a rebound of growth over the summer will finally lift the country out of recession after three consecutive quarters of falling output.
Meanwhile, a separate report from Local Data Company (LDC) said today that nearly one in seven British shops remained vacant at the end of June as retailers struggled in a double-dip recession. The consultancy reported that there had been no improvement in the second quarter from March's UK shop vacancy rate of 14.6%, the highest level since June 2008, and that it did not expect the situation to ease any time soon.
Vacancies increased in all regions apart from London over the past 12 months. The rate in the capital fell from 10.7% to 10.1%.
Retailers have closed poorly performing outlets, while some have gone out of business, hit by the combination of constrained consumer spending, muted wage growth and government austerity measures. "Normal service is unlikely to be resumed any time soon as far as retailers are concerned," LDC said. "For the high street, and especially for secondary shopping centres, it is clear that the current high levels of vacancy are likely to remain."
NamNews - Tuesday 4th September 2012