UK retailers reported their slowest sales growth in five months during July as consumers shifted toward spending on entertainment and social gatherings and away from in-store shopping.
The volume of goods sold in shops and online grew 6.4 per cent in July compared to last year, the British Retail Consortium and KPMG said. A separate survey from Barclaycard, which handles almost half the credit and debt card payments in the UK showed more money going into bars, theatres and sporting events and a drop in face-to-face retail.
The surveys add to evidence that the pace of the UK’s economic rebound is moderating after a sharp surge following a loosening of coronavirus restrictions over the past few months.
Brexit
The BRC also said retailers are feeling a pinch from Britain's decision to leave the European Union, which exacerbated staff shortages and border frictions that are starting to weigh heavily on the industry.
"The lifting of restrictions did not bring the anticipated in-store boost, with the wet weather leaving consumers reluctant to visit shopping destinations," said Helen Dickinson, chief executive officer of the BRC. "Many shops and local communities have been battered by the pandemic, with many high streets in need of further investment."
Barclaycard said entertainment spending in July bounced back for the first time since the onset of the pandemic. Pubs, bars and clubs extended post-lockdown gains, with a 30 per cent increase in spending compared with the same period in 2019.
Restaurant spending fell below pre-Covid levels, capping a five-month rally as people watched Wimbledon tennis and the European soccer contests at home, delivering a surge in spending on takeaway meals.
"While some sectors took a small step back as the post-lockdown 'honeymoon' period cooled, July was a positive month overall," said Raheed Ahmed, head of consumer product at Barclays Bank. "However, with inflation expected to rise, it will be interesting to see how this impacts consumer spending behaviour over the coming months." – Bloomberg
