Shoppers applied the brakes on spending last month amid concerns over the potential for higher interest rates, a retail industry report suggested today.
The latest retail sales index from the British Retail Consortium (BRC) and KPMG showed that like-for-like sales fell 0.8% compared with a year ago, with total sales when including shops open for less than a year up just 0.6%.
The report showed that consumers continued to benefit from competitive pricing in the supermarket sector as underlying sales in food were 2% lower in the three months to June, compared with a year earlier.
Home accessories was one of the weakest performing sectors in the month, prompting KPMG’s head of retail David McCorquodale to speculate that the timing of the first hike in interest rates was having a dampening effect on sales.
The survey covered the month in which Bank of England governor Mark Carney warned that rates could rise sooner than markets were expecting.
Mr McCorquodale said: “Even sales of home accessories and furniture flatlined, which is surprising given the UK is reportedly in the midst of a housing boom.”
Clothing retailers fared better, with recent sunshine driving demand for summer clothes and meaning that most retailers were not forced to resort to the deep discounting of previous years.