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A Retail and Brewery Industry Update

7 August 2018

The British Retail Consortium (BRC) reports how retail sales have slowed in July. Compared to sales in-store last year, the figures are down 0.5%.

Helen Dickinson, CEO of BRC says that ‘’Autumn could not come sooner’’, for the many struggling retailers. She puts the recent heatwave at the front of the causes, with the prolonged high temperatures putting people off of browsing in shops and lowering the demand for summer products.

Head of retail at KPMG UK, Paul Martin suggested that ‘’it was just too hot to hit the high street’’. He stated that the survey results showed the many challenges retailers were facing, warning that it will take a lot to improve the high streets health.

Many retail stores are struggling with the recent crisis. House of Fraser is awaiting funding for itself to survive. Mothercare and Carpetright have been forced to shut some of their stores to survive, using a Company Voluntary Arrangement process. Maplin and Toys R Us have already collapsed into administration this year, with Toys R Us now completely exited from the UK high street.

Despite the slowdown, food spending has been found to have increased 4.5% - the highest July food sales in 5 years.

Additionally, Barclaycard ran a separate survey, which produced a slightly more optimistic outlook. They found consumer spending to rise 5% year on year in July. They also reported that pub spending had risen 17%, showing the biggest increase since April last year.

However, news has also been released today by The Campaign for Real Ale (CAMRA). It has reported that as many as 476 pub closures occurred in just the first half of this year. Four out of five people have said that a pub has been shut down within 5 miles from their home in the last 5 years. Taxes, the National Living Wage, increased rent and high rates have forced up the price of beer, with consumers now believing the price is unacceptable. This, along with consumer trends that young people drink less alcohol, has put a strain on pubs and breweries. Those who do drink, are finding cheaper ways to consume the alcoholic beverages.

Therefore, any rises in spending are said to be short term, as consumers today, are less confident about their finances than they were a year ago. 

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