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UK retail sales growth slowed again in June continuing a three month downward trend as soaring inflation and falling real wages impact consumers stifles retail spending.
The monthly BDO High Street sales tracker for June, found that total like-for-like sales grew by 8.4% in the month June from a base of 52.1% growth for the same month last year.
Total in-store like for like sales were up by 14.8%, with total non-store LFLs up by 1.6%.
Sales growth remained positive in June though growth rates, which have been trending downwards since mid-April, slowed again, BDO said.
Both in-store and online channels recorded more restrained growth. Total non-store LFLs were relatively flat in June while in-store LFLs took a step towards more normal territory for the first time since the start of the pandemic.
This month’s result marks the lowest total LFL since February 2021.
BDO said the deceleration of sales in June may point to rising caution amongst consumers who have already reduced spending on essential items and will likely be reconsidering major purchases.
For example, homewares appear to have taken the hardest hit as reflected by the category’s negative performance throughout June.
“With recent reports indicating that consumer confidence has dropped to all time lows coupled with pressures on disposable income, discretionary spending is likely to see further restraint in coming months,” it said.
“Cost pressures and supply issues faced by retailers alongside plunging consumer confidence suggest that retailers and consumers are likely to face a challenging second half of the year.”
Overall footfall stayed positive throughout the month of June. Footfall on the high street recorded its largest rise (+24.6%) in the third week of the month, while its lowest result (+13.3%) was recorded in the first week.
Morning update
Sports nutrition specialist Science in Sport has warned its first half sales performance will come in under market expectations.
Announcing a trading update for the six months to 30 June 2022, the group said revenue growth for the period is expected to be approximately 12%, which is lower than expected.
The group insisted its growth will improve in the second half through investment in brands and digital channels, and through improved pricing.
Meanwhile, “external factors” indicate an adverse £3.2m of costs or margin loss for the year compared to budget.
It said this includes raw material price increases, fuel and logistics costs, people retention costs, and closure of its Russian business.
However, on a more positive note, its new Blackburn site is close to completion, with the logistics operation delivering the expected efficiencies and cost savings in line with the business case.
It said its gel machine is being installed, and the site will be fully operational by the end of July.
On the markets this morning, the FTSE 100 has edged up 0.1% to 7,194.2pts.
Early risers include Bakkavor, up 2.6% to 91.4p, McBride, up 1.3% to 16.8p and Devro, up 1% to 182p.
Fallers inclde Science in Sport, down 28.6p after this morning’s warning, Naked Wines, down 6.5% to 160.8p and Marks & Spencer, down 3.8% to 133.5p.
Yesterday in the City
The FTSE 100 continued to recover from Tuesday’s plunge, rising another 1.1% to 7,189.1pts yesterday.
Consumer names on the rise included Ocado, up 3.4% to 851.4p and its retail partner Marks & Spencer, up 2.7% to 138.7p.
Other risers included McBride, up 2.5% to 16.6p, Domino’s Pizza Group, up 2.4% to 285.6p, THG, up 2% to 81.8p, B&M European Value Retail, up 1.8% to 377p, WH Smith, up 1.8% to 1,386p and Hotel Chocolat, up 1.6% to 255p.
The day’s fallers included Bakkavor, down 9.1% to 89.1p, Diageo, down 2.6% to ,518.5p, Coca-Cola HBC, down 2% to 1,800p, FeverTree, down 1.6% to 1,284p, British American Tobacco, down 1.6% to 3,379.5p and Kerry Group, down 1.5% to €95.50.
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