Analysis: July retail sales sector by sector

We break down the industry’s sales performances last month sector by sector.

Food – Up

Food continues to prop up overall retail sales as the rest of the industry suffers a squeeze on discretionary spend. Growth is being driven more by price than volume and that trend is expected to continue against a backdrop of increased consumer borrowing and pressure on real wages. When inflation was stripped out of food sales it emerged that the three-month average for food growth was 2%, down from 3.4% the previous month as sales moderated.

Clothing – Down

Clothing sales suffered in July after shoppers flocked to buy their summerwear the previous month when there was a spell of hot weather. However, it was not all doom and gloom across fashion. The onset of the summer holidays provided a boost for children’s clothing, the best performing category.

Cooler and wetter weather in the latter half of the month resulted in autumn ranges exceeding expectations for the time of year.

A number of fashion retailers scored an own goal after failing to hit the right price points or nail promotions. Online fashion sales recorded a slowdown in growth in July, and as a result online’s share of the market fell month-on-month versus physical retail.

Footwear – Up

After a torrid time last year, footwear showed signs of recovery. Year-on-year sales were up in July, helped by strong demand for women’s summer shoes such as canvases and sandals.

The pre-holiday demand for children’s fashion was reflected in the category, which was also boosted by back-to-school ranges because of the new school term starting earlier in Scotland.

Deeper discounts in some areas also helped push volumes up. It was a different story for men’s footwear in July however, and retailers had to work especially hard to shift stock after strong sales in June owing to Father’s day.

Health and beauty – Down

Health and beauty recorded a sharp reversal of fortunes in July when the category significantly underperformed on a year-on-year comparison.

The poor showing was down to disappointing sell-through from markdown and lower footfall as shoppers’ enthusiasm for traditional seasonal promotions waned. Footfall was also down in July after a rush in June when there was good weather.

Travel stores performed well as people bought last-minute toiletries before their holidays.

Furniture – Up

The weather in July kept people indoors and some turned to sprucing up their homes. Furniture sales are often seen as a bellwether of consumer confidence, but growth in the category in July should be treated with caution, the BRC said. 

The fact that furniture sales bucked under-pressure consumer confidence trends suggests that shoppers are still willing to make big ticket purchases if the product is right.

Home accessories – Up

This was the strongest performing growth category as it recovered from a dismal June.

There had been a poor performance in June as consumer spend was diverted to stocking summer wardrobes and the purchase of festival paraphernalia.

Home accessories retailers succeeded in striking the promotional balance as they managed to attract shoppers with promotions but limited Sales to fewer lines. Full price goods in turn benefited from greater sell-through.

House textiles – Up

The trends seen in home accessories were repeated in textiles as spend diverted from fashion to the home.

Growth was driven by online, and in-store sales narrowly missed a return to positive territory. Online sales accounted for 30% of sales for the first time this year, but volatility is expected to increase as a result of challenges facing the retail sector generally.

Toys and baby equipment – Down

The category was another victim of June’s warm weather when there was demand for paddling pools and similar, resulting in a dismal July for toys.

It is suggested parents may also have been turning their backs on conventional toys when keeping their children busy in the holidays.

The peak period for births is now approaching, which meant nursery and baby products performed well.

Household appliances – Down

Household appliances continued to struggle to show growth and like-for-like sales in July were not helped by the comparable period a year ago that drove demand for fans. A scorching June also fuelled a rush to the shops to buy fans, which contributed to a sales fall in July.

A lack of innovation in the category area further hampered retailers, which are calling out for a new bestseller such as the Nutri-Bullet.

Other non-food – Down

Although like-for-like sales were down in other non-food, they have improved from their nadir in May. Online sales in gaming and computing have helped ease the decline.

Jewellery and watches – Down

Jewellery and watches recorded a gangbuster year in 2016 because currency depreciation fuelled growth in spending by overseas visitors.

So it was no surprise that growth in the category area has dampened. It was one of the poorest performers and it is expected that trend will continue because last year’s sales surge continued well into the autumn.