June sales show a positive outlook for retail

13 July 2023, 12:43 PM
  • Food sales increased in June as the high street came back to life, but there is still reason to be wary as the summer months unfold
June sales show a positive outlook for retail

According to data from the British Retail Consortium and KPMG, UK total retail sales increased by 4.9% in June, against a decline of 1.0% in June 2022. This is above the three month average growth of 4.6% and the 12 month average growth of 4.0%.

Furthermore, food sales increased 9.8% on a total basis and 10.1% on a like-for-like basis over the three months to June. This is above the 12 month total average growth of 7.7%, and for the month of June, food was in growth year-on-year.

The statistics indicate a positive outlook for the rest of the summer, as Jeff Moody, commercial director at The British Independent Retail Association (BIRA), told Speciality Food, “The recent good weather has been a welcomed boost for high street fine food retailers such as delis and cheesemongers, who have experienced increased sales as a result.”

A positive start to the summer
This news was well received by Emma Jones, founder of Enterprise Nation, who told Speciality Food, “It’s great to see a bigger portion of consumer food spend going to independents last month. Our own recent report found independent food outlets are playing an increasingly important role in our communities and on our high streets. Retailers will take heart from these figures after a difficult year so far.”

Jeff agreed, “With the sun shining and people venturing out more, the appeal of visiting local food retailers on the high street has grown. Customers are seeking out fresh, high-quality ingredients and unique culinary experiences, which they often find in the specialised offerings of these food retailers. 

“Whether it’s the artisanal cheeses, gourmet charcuterie, or freshly baked bread, these establishments have managed to capture the attention and appetites of consumers.

“The allure of the high street fine food retailers lies in their ability to offer a more personalised and curated shopping experience. 

“Shoppers can engage with knowledgeable staff, discover new and exciting products, and indulge in the sensory pleasures of exploring a variety of delectable treats. This immersive experience is often difficult to replicate online, making these brick-and-mortar food retailers a preferred destination for many culinary enthusiasts.

“As a result of these factors and the recent favourable weather, high street fine food retailers have seen increased footfall and sales. The demand for their unique offerings, combined with the desire for outdoor socialising and al fresco dining during the summer months, has driven customers to seek out these culinary havens. It’s encouraging to see these local businesses thrive and contribute to the vibrancy of our high streets.”

A fragile sector
But despite a good start to the summer, the state of the independent sector remains fragile, and government intervention is needed for small businesses to thrive.

As Martin McTague, national chair of the Federation of Small Businesses, explained, “We’re hopeful this is a positive sign for future growth – however it remains clear that small firms continue to navigate significant challenges, and we must not lose sight of the broader, economic landscape. Costs remain high, and consumer confidence is fragile.”

One step towards this, advises Emma, is for businesses to gain access to training and support to help build resilience to future shocks. “They also need more affordable access to commercial property, be that a shop on the high street or a unit for food manufacture. For example, we’d like to see local authorities empowered to have more responsibility over business rate reliefs and offer relevant exemptions for small businesses that will help to build communities,” she added.

Martin also suggested, “An increase in the VAT threshold could spark growth, encouraging businesses to increase their turnover. Raising the Small Business Rates Relief (SBRR) threshold to £25,000 could liberate 200,000 small firms from this burden.

“As SMEs grapple the aftermath of the energy crisis, they should be allowed to ‘blend and extend’ and renegotiate contracts set during the energy crisis, enabling them to benefit from current lower prices. In turn, this ought to help keep retail prices down for consumers who are feeling the pinch of interest rate rises.”

Most importantly, “Moving forward, it is crucial for the government to recognise the value and importance of these independent food retailers”, Jeff told Speciality Food

“By providing support and creating an environment conducive to their growth, we can ensure their continued success and contribute to the revitalization of our high streets. As we navigate the recovery phase, nurturing these unique businesses and fostering consumer confidence will be key to building a resilient and thriving retail sector.”

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