Record promotions drive retail growth

Retail sales picked up in July, driven by “unprecedented” promotional levels, according to the latest figures from the British Retail Consortium (BRC).

/r/o/p/highstreet.jpg

Total sales increased 2.5% in July, or 0.6% on a like-for-like basis.

Food sales increased 3.6% in the three months to July, compared with the same period a year ago, while non-food sales fell 0.4%.

The monthly figures show that clothing and footwear were helped by clearance sales while homewares sales were down and mostly promotion-led as consumers steer clear of big-ticket housing-related purchases.

Stephen Robertson, director general of the British Retail Consortium, warns that “conditions remain very difficult for retailers” as shoppers were only tempted into stores by an “unprecedented number of promotions which come at the expense of margins”.

He says: “Growing fears of a global economic slowdown and a sovereign debt crisis have sent shockwaves through financial markets.

Policymakers in Europe and the US must act quickly to implement a coordinated and credible strategy to reduce public sector deficits while supporting growth. Business and consumer confidence needs to be restored quickly before spending paralysis sets in.”

Talking about the continued use of sales and promotions despite the impact on margins, a BRC spokeswoman added: “Retail is a very competitive sector and at a time when disposable incomes are being stretched, retailers know that offering value is a crucial part of encouraging customers through their doors.

“The UK has a very established special offer culture that shoppers are familiar with and value highly. Individual retailers have to carefully balance the level of discount and promotion they can offer against being a profitable business.”

Heinz chief operating officer Matt Hill recently spoke to Marketing Week about the steep supermarket price promotions “destroying category value”.

The figures back up the BDO monthly high street tracker, which revealed yesterday (8 July) that early summer sales and wet weather boosted high street sales in July.

Latest from Marketing Week

NOT REGISTERED? IT'S FREE, QUICK AND EASY!

Access Marketing Week’s wealth of insight, analysis and opinion that will help you do your job better.

Register and receive the best content from the only UK title 100% dedicated to serving marketers' needs.

We’ll ask you just a few questions about what you do and where you work. The more we know about our visitors, the better and more relevant content we can provide for them. And, yes, knowing our audience better helps us find commercial partners too. Don't worry, we won't share your information with other parties, unless you give us permission to do so.

Register now

THE BEST CONTENT

Our award winning editorial team (PPA Digital Brand of the Year) ask the big questions about the biggest issues on everything from strategy through to execution to help you navigate the fast moving modern marketing landscape.

THE BIGGEST ISSUES

From the opportunities and challenges of emerging technology to the need for greater effectiveness, from the challenge of measurement to building a marketing team fit for the future, we are your guide.

PERSONAL AND PROFESSIONAL DEVELOPMENT

Information, inspiration and advice from the marketing world and beyond that will help you develop as a marketer and as a leader.

Having problems?

Contact us on +44 (0)20 7292 3711 or email subscriptions@marketingweek.com

If you are looking for our Jobs site, please click here