Analysts warn of weak growth in retail sales

Retail food sales in July showed signs of improvement compared to the previous three months, but growth remains weak, a duo of city analysts have said.

Total retail sales for July were up 2.5%, the British Retail Consortium (BRC)-KPMG retail figures revealed, with like-for-like foods sales up 0.9%. 

Dave McCarthy and Andrew Porteous, of Evolution Securities, said that conditions remained tough, with consumers showing very little loyalty and still needing encouragement to spend.

They pointed out that supermarket promotions are at record levels, but these are expensive and will impact on retailers’ margins.  

They said: “The internet has increased price transparency and with increased price sensitivity, retailers must remain flexible. Consumers want low prices, are very mobile and are likely to remain promiscious.

“Tesco and Sainsbury’s continue to pour money into their loyalty schemes, but this environment is about low prices, not marketing ploys.

“If retailers are assuming a second-half recovery, they could be disappointed.”


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