Retail sales in June boosted by hot weather

Retail sales saw a positive rebound in June, driven by the hot weather which boosted fuel and supermarket sales, as per official data from the Office for National Statistics (ONS). Sales volumes increased by 0.9% in the month, with people purchasing more drinks at supermarkets and summer clothes. Fuel sales also saw a rise as consumers took advantage of the sunshine to venture out more.

The June increase comes after a significant 2.8% decline in May, which was higher than initially estimated by the ONS. While a rebound was expected following May’s drop, the actual increase in June was lower than what many economists had predicted. Ruth Gregory, deputy chief UK economist at Capital Economics, described the sales increase in June as “disappointingly small”.

The monthly retail sales figures have been fluctuating recently, influenced by weather patterns and the timing of Easter. However, overall retail spending growth has slowed down, with sales only up by 0.2% between April and June compared to the previous three months. This aligns with a Gfk survey indicating weaker consumer confidence compared to a year ago, suggesting that upcoming economic growth figures for the second quarter of the year may show lackluster performance.

Food store sales rose by 0.7% in June, while fuel sales surged by 2.8%. ONS senior statistician Hannah Finselbach attributed the brightened sales to the warm weather, with supermarkets reporting stronger trading and increased drink purchases. Additionally, a good month for fuel sales was noted as more consumers were out and about in the sunny weather.

Non-food store sales also saw an increase, with clothing benefiting from promotions and the hot weather. However, sales of household goods like furniture experienced a decline. Jacqueline Windsor, head of retail at PwC UK, credited the rebound in supermarket and fashion retailer sales to consumers entertaining at home and updating their wardrobes. Despite the positive sales trend, footfall on high streets decreased as online retail sales penetration rose due to the record-breaking warm June in England.

These retail sales figures come amidst a series of negative economic news, including higher-than-expected government borrowing in June, unexpected economic shrinkage in May, and a rise in inflation to 3.6%. As the economy navigates through these challenges, monitoring retail sales trends will provide valuable insights into consumer behavior and overall economic health.