.png)
The impact of weather and inflation on retail sales
Retail sales growth in July was impacted by wet weather and slowing inflation, leading to a drop in sales volume and an increase in retailers offering discounts to attract hesitant customers. Consumers are becoming more price-conscious, and despite promotional offers, the value of spending rose modestly and the value of sales fell when inflation is taken into account. Online sales continued to decline, suggesting a trend of returning to physical stores. The future trends and challenges faced by retailers remain uncertain.
Steven
Hey Stephany, did you see that retail sales growth in July was affected by the wet weather and slowing inflation?
Stephany
Yes, I read about it. The British Retail Consortium and KPMG reported a drop in sales volume and an increasing number of retailers offering discounts to attract hesitant customers.
Steven
That's right. The report also mentioned that consumer sensitivity to "shrinkflation" has broadened to include alcoholic drinks. More than one in five consumers have experienced "drinkflation" where drinks contain less alcohol but are still priced the same or higher.
Stephany
It's interesting how consumers are becoming more price-conscious. Retailers are putting in place more promotions to attract shoppers and keep their market share.
Steven
Absolutely. But despite the increase in promotional offers, the value of spending rose modestly in July. However, once inflation is taken into account, the value of sales actually fell. It's a challenging situation for retailers.
Stephany
Definitely. The high inflation coupled with rising interest rates will test consumers' ability and willingness to keep spending. It's a tough time for both consumers and retailers.
Steven
I agree. The report also mentioned that online sales continued to slide, with only a few categories performing well. It seems like the trend of returning to physical stores is continuing.
Stephany
That's interesting. I guess people are craving the in-person shopping experience after the pandemic. But I wonder if this trend will continue or if online sales will pick up again in the future.
Steven
It's hard to say. The report didn't provide much insight into the future trends. But it's clear that retailers are facing challenges and are having to do more with less.
Stephany
I have to go. I must finish an assignment before the deadline. It was an interesting discussion though. Let's catch up again soon!
Steven
Sure, no problem. Good luck with your assignment! Talk to you later.