Retail sales had been expected to fall in June, partly given poor weather, the run-up to the General Election and the focus on the Euro 2024 football championships in Germany, but the drop was much sharper than predicted.
Data published today by the Office for National Statistics revealed a 1.2% month-on-month plunge in retail sales volumes in Great Britain in June on a seasonally adjusted basis, with economists polled by Reuters having overall forecast a 0.4% decline. And the fall was broadly based across retail sub-sectors.
The figures would appear to highlight the ongoing financial pressure on consumers, who have been hit hard by the UK’s cost of living crisis and continue to face the permanent effects of this.
READ MORE: Ian McConnell: A huge majority but Starmer has boxed himself in already
Excluding automotive fuel, the month-on-month drop in retail sales volumes in June was 1.5%.
Retail sales volumes had risen by 2.9% month-on-month in May. However, last month’s tumble meant they were down 0.1% quarter-on-quarter over the three months to June.
Lisa Hooker, leader of industry for consumer markets at accountancy firm PwC UK, said: ““Following May’s partial recovery, retail sales fell in June across every category of retailer, with the unseasonably cool weather putting a chill on high street activity. Headline sales volumes excluding petrol fell by 1.5% compared with the previous month, and fell by 0.8% compared with last June."
READ MORE: Ian McConnell: Make no mistake - this is no 1997 for Labour
She highlighted weakness in supermarket and clothing sales.
Ms Hooker said: "The biggest volume declines included supermarkets, which sold 3.1% fewer items than last June, and fashion retailers, where volumes fell by 4.5%. In fact, clothing volumes have now fallen every month since last autumn, which explains some of the heavy discounting and earlier sales that shoppers are now enjoying, as retailers rush to clear seasonal stock."
READ MORE: Ian McConnell: Time to stop kicking Ferguson Marine shipyard around
She noted that “online was about the only winner, increasing sales compared to last June”.
Ms Hooker added: “Despite falling inflation, wage increases, benefit increases and lower national insurance rates, it appears that the cooler, wetter weather over spring and early summer, combined with longer-term uncertainty in the period prior to the General Election, has discouraged shoppers from both buying seasonal goods and making longer-term, big-ticket purchases.”
The EY ITEM Club think-tank saw signs of an improvement in retail sales over the first half of this year, in spite of the “disappointing” second-quarter decline.
It said: “A poor June capped off a disappointing quarter for UK retail sales, which were down 0.1% quarter-on-quarter in Q2. But the data has been extremely noisy in recent months, even by the standards of retail sales, and the softer Q2 followed a much stronger Q1. Indeed, the underlying trend appears to be one of gradual improvement.”
Dan Coatsworth, investment analyst at stockbroker AJ Bell, said: “The public had plenty of distractions in June, namely the [July 4] General Election, miserable weather, the Euro football championship and high interest rates continuing to put pressure on household finances. It’s no wonder that retail sales were poor in the month.
“The retail industry has had one of the most challenging years in living memory thanks to unfavourable weather conditions and the ongoing cost of living crisis. The pace of inflation might be easing but the cost of goods is still going up.”
He added: “Decent wage growth has been welcome, but the general backdrop has kept retailers on their toes, desperate for ways to keep the tills ringing without resorting to bargain-basement prices that leave them with little to no profit.”
Why are you making commenting on The Herald only available to subscribers?
It should have been a safe space for informed debate, somewhere for readers to discuss issues around the biggest stories of the day, but all too often the below the line comments on most websites have become bogged down by off-topic discussions and abuse.
heraldscotland.com is tackling this problem by allowing only subscribers to comment.
We are doing this to improve the experience for our loyal readers and we believe it will reduce the ability of trolls and troublemakers, who occasionally find their way onto our site, to abuse our journalists and readers. We also hope it will help the comments section fulfil its promise as a part of Scotland's conversation with itself.
We are lucky at The Herald. We are read by an informed, educated readership who can add their knowledge and insights to our stories.
That is invaluable.
We are making the subscriber-only change to support our valued readers, who tell us they don't want the site cluttered up with irrelevant comments, untruths and abuse.
In the past, the journalist’s job was to collect and distribute information to the audience. Technology means that readers can shape a discussion. We look forward to hearing from you on heraldscotland.com
Comments & Moderation
Readers’ comments: You are personally liable for the content of any comments you upload to this website, so please act responsibly. We do not pre-moderate or monitor readers’ comments appearing on our websites, but we do post-moderate in response to complaints we receive or otherwise when a potential problem comes to our attention. You can make a complaint by using the ‘report this post’ link . We may then apply our discretion under the user terms to amend or delete comments.
Post moderation is undertaken full-time 9am-6pm on weekdays, and on a part-time basis outwith those hours.
Read the rules hereLast Updated:
Report this comment Cancel