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UK consumers keep spending despite expectations of a post-Brexit slump

Europe - Brexit jigsaw pieces

UK retailers saw a 1.9% increase in sales in July year-on-year, defying expectations of a drop following the Brexit result.

The results of the British Retail Consortium and KPMG's latest Retail Sales Monitor gives an indication of consumer confidence in the UK. The sales increase is based on weekly data fed in to KPMG. Retailers report the value of their sales for the current period and the equivalent period a year ago. These figures are reported both in total and on a ‘like-for-like’ basis.

David McCorquodale, KPMG head of retail, said the summer weather coupled with seasonal sales helped spur purchases.

McCorquodale said: "Warmer weather helped blow away some of the post-referendum blues, boosting the UK feel good factor and giving consumers a sense that ‘life goes on’ following the initial shock of the Brexit vote.

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

McCorquodale said the first full month of retail sales figures post-vote suggests "UK shopping patterns haven’t changed versus previous years".

Helen Dickinson, British Retail Consortium chief executive, said: “This month’s solid sales figures may come as a shock to some given the slew of early indicators suggesting that consumer activity was slowing in the wake of the referendum result.

"However, little has materially changed for most UK households in the wake of June 23, so it is not surprising to us that sales are simply responding to their normal underlying drivers. A heavy month of promotions proved very successful in appealing to bargain-hungry shoppers."

Dickinson said “there doesn’t appear to be much sign” of a fall in consumer confidence feeding into retail demand.

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