Murray fever gives retailers reason to cheer as sales rise

Retailers will enjoy a lift from Andy Murray's Wimbledon win, with the imminent royal birth also set to drive sales. Picture: Getty
Retailers will enjoy a lift from Andy Murray's Wimbledon win, with the imminent royal birth also set to drive sales. Picture: Getty
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BRITAIN’s shopkeepers are hoping a combination of Andy Murray fever, the return of blue skies and an imminent royal baby will create a feelgood factor and encourage consumers to return to the high street.

The British Retail Consortium (BRC) said today that June had witnessed a “strong performance” with growth across all categories, led by fashion sales as the weather warmed up.

The higher temperatures also boosted sales of DIY and gardening products – areas that had been hit badly by the cold snap earlier in the year.

There was an above-inflation 2.9 per cent rise in total sales last month, compared with a year ago, according to the BRC’s latest snapshot. The figure is just ahead of the year-to-date average of 2.8 per cent.

It adds to other upbeat signals on the economy including news yesterday that BDO’s business optimism index had hit a 13-month high. Andy Murray’s triumph at Wimbledon is seen to have lifted morale across the UK.

Helen Dickinson, the BRC’s director-general, said the retail recovery had taken hold with sales in the year to date “well ahead” of the previous six months.

She said: “Despite challenging economic conditions continuing, June saw another strong performance from the UK’s retailers, with very respectable overall growth across the categories.”

The increase in food sales was broadly in line with inflation, but the BRC described this as a “good result” given that the same month last year was boosted by the Jubilee celebrations.

Dickinson added: “With spirits and temperatures lifted following the weekend and further feel-good news expected later in the month, retailers will be hoping that July builds on this encouraging trend.”

Measured on a like-for-like basis, which strips out the impact of new and enlarged stores and shopping centres, there was a 1.4 per cent rise in overall sales values in June – matching the year-on-year gain seen in 2012.

Fears remain, however, over the strength of the upturn, with a question mark hanging over the future of scores of struggling chains. The threat from online shopping shows no sign of abating either, with the BRC reporting a 14.1 per cent surge last month – well ahead of the 12-month average of 10.5 per cent.

David McCorquodale, head of retail at KPMG, which helps compile the monthly report, said: “This is another respectable performance by UK retailers. Sales are moving in the right direction, albeit hard-earned and promotion driven.

“Retailers will hope that the arrival of a royal baby will deliver a feel-good lift to sales this month, as consumers stock up on champagne and commemorative items.

“While this temporary uplift won’t transform the fortunes of the UK retail sector, a mini memorabilia bonanza would still raise some much-needed cash for retailers’ coffers, putting them on a stronger footing as they restock stores with autumnal ranges.”

Howard Archer, chief UK economist at forecasting consultancy IHS Global Insight, said: “The consumer will play a crucial role as to whether the economy can sustain and build on its recent, encouraging widespread signs of improvement.

“However, consumers remain under pressure on a number of fronts which suggests that the upside for consumer spending could be limited for some time to come. In particular, annual underlying earnings growth remains very low.

“Tighter fiscal policy is also affecting many families, while debt levels are still high despite significant progress having been made in deleveraging.”