KPMG: UK Retailers Face Ongoing Challenges

By Kalen Smith, Big4 Blogger

A new study from Deloitte has found that UK retailers are struggling to maintain their sales. Businesses throughout the country predicted that the Olympics would help drive revenue for retailers throughout the country. However, July sales fell short of expectations. Revenue only increased 0.1% over June. Sales were only 0.6% higher than they were in July of 2011.

Warmer weather helped drive sales at the end of the month. Without a sudden heat wave and a modest increase in Olympic purchases in the final week of July, sales would have contracted for the month. Most of the increase in purchases resulted from food and drink purchases as people wanted to take advantage of the warm summer weather. Sales of larger items such as furniture were stronger year-over-year, but the increase wasn’t as significant as the previous year.

Helen Dickinson, KPMG’s head of retail, said future prospects for retailers aren’t encouraging. July was expected to be one of the best months for consumer purchases, especially in wake of the summer Olympics. Actual sales were disappointing and there are no signs that they are going to pick up anytime soon.

Reports on the state of the retail industry are not encouraging, as the UK economy continues to face the burden of a double dip recession.