Furniture rebound boosts retail sales

Furniture and floor covering retailers enjoyed their best monthly performance for more than three years in July after the soggy second-half of the month and clearance sales set tills ringing.

Further strong sales at homeware chains helped the retail sector deliver a 1.8 per cent rise in like-for-like sales last month, up from 1.4 per cent in June, year on year, according to the British Retail Consortium-KPMG survey.

The better-than-expected uplift in underlying sales – the second highest in 2009 after April's rise of 4.6 per cent, which was boosted by a late Easter – provides further evidence that, for retailers at least, the worst of the recession now appears to have passed.

Stephen Robertson, the director general of the BRC, said: "The largely cooler, wetter second half of the month turned attention indoors, helping sales of furniture and homewares which have been under pressure throughout the downturn. There are some signs that people are using holidays to improve their homes rather than spending on going away."

Total retail sales grew by 3.6 per cent in July, which was better than the 3.2 per cent increase in June but below April's 6.3 per cent surge. After many months of dreadful sales, furniture and floor covering stores posted their best sales since May 2006.

Clearance sales and recent upbeat news about the housing market drove customers into shops and the wet weather helped to boost sales of indoor furniture, rather than garden items. The recent housing data also boosted homewares retailers, who said they enjoyed a "strong uplift".

DIY stores continued to benefit as families decided to modernise their homes rather than move house, and the damp weather boosted indoor decor transactions. The deluge in the second-half of the month also helped to increase footfall and sales at department stores. However, after a strong start to the month during the heatwave, heavy rain dragged sales at clothing shops back below their July 2008 level

While shoppers balked at adding to their summer wardrobe during the second half of July, cooler weather got new autumn and winter collections off to a robust start. Elsewhere, the revival in the shoe sector continued. The star performer was children's footwear, driven by back-to-school products and wellies flying off the shelves during the wet weather.

For the grocers, food sales slowed because of lower inflation. For the three months to the end of July, like-for-like food sales growth slowed to 4.2 per cent – the lowest figure since the final quarter of 2008. Mr Robertson said: "Rising unemployment and job loss fears will continue to hold back the widespread return of consumer confidence for some time yet."