Many in the retail industry were initially happy to hear that the UK was going to experience a prolonged heatwave, expecting this to translate into boosted sales. As such, many retailers had stocked up on summer-related items, with everything from inflatable pools and BBQs to sunhats and ice. However, the latest figures for July released earlier this week by the British Retail Consortium suggest that sales in retail stores have only increased by 0.5% on last year, compared to a 1.1% increase experienced in June.
This slowdown has come despite July showing the best food sales in the last five years. Instead of customers shopping for summer and sun-related items, it seems that the prolonged heat has had the opposite effect, putting shoppers off visiting retail areas, browsing and buying. The same report showed that total retail sales in July also slowed down, rising only 1.6% compared to a 2.2% rise in June.
Meteorologists have predicted that the warm weather could last until October, which means that retailers will quickly need to adapt their marketing and promotional campaigns to further increase footfall and conversion in stores.
The heatwave has helped to see an increase in sales of fans, food and drinks, but these are narrow markets that not every retailer can quickly and temporarily capitalise on. As such, for many retailers, it seems that the cooler weather and autumn cannot come soon enough. However, given the continuous rising summer temperatures over previous years, and the expected continuation of this trend due to global warming, this could be a worrying future consequence of the heat for retailers. If the slowdown of retail sales continues to be a common consumer response to the heat, this adds further pressure to the already struggling high street.
While the retail sector hasn’t seen the growth in sales is expected, spending in pubs had increased by almost 17%. This is likely to have been predominantly due to England’s performance in the World Cup, so this increase is unlikely to represent a long-term trend.
Despite the British Retail Consortium’s report, a separate report by Barclaycard suggested that July’s figures haven’t been as bad, finding that spending has risen by 5% from last year. But the report cautions that this rise is likely to be temporary and short-term, citing consumers’ lack of confidence in their household finances compared to this time last year as one key reason.