Retail sector has turned a corner, says EY ITEM Club
15 August 2013
- The feel good factor has helped boost sales volumes in July
- Consumer spending is likely to contribute strongly to GDP growth in Q3
- After stagnating over the past five years sales volumes finally seem to be on an upward trend
Nida Ali, economic adviser to the EY ITEM Club, comments on today’s retail sales figures:
“July's solid increase in retail sales, on top of healthy growth in the previous two months, marks an excellent start to the third quarter. Higher consumer confidence and the feel good factor from sunny weather seems to have helped boost sales volumes.
“In July, food and online sales were the main drivers of overall sales growth but, looking through the monthly volatility, the retail sector has built an impressive head of steam. Sales in the three months to July, compared to the previous three months, have risen across all sub-sectors. We expect this positive trend to continue over the next couple of months, with consumer spending on course to make a strong contribution to GDP growth in the third quarter.
“Looking at the historical trends, there are signs that the retail sector has turned a corner. Since the onset of the financial crisis, sales volumes had broadly flat-lined. A steady fall in food sales, presumably because of less wastage, was being offset by an increase in online sales. However, there has been a clear upturn over the past couple of months suggesting that the retail sector may now be breaking free from this stagnation.”