UK retail sales slide in June - ONS
By Abigail Townsend
Date: Friday 19 Jul 2024
(Sharecast News) - UK retail sales fell by more than expected in June, official data showed on Friday, partially reversing May's jump.
According to the Office for National Statistics, retail sales volumes fell 1.2% last month, compared to a 2.9% rise in May.
Most analysts had pencilled in a far smaller decline, of around 0.4%.
The ONS said that with the exception of petrol stations, sales had fallen across all the main shop types during the month.
Department stores was one of the biggest contributors to the decline, with a 3.1% decrease, along with furniture and clothing shops.
Across the second quarter, sales volumes fell by 0.1% or by 0.2% year-on-year.
The biggest falls in the three months to June-end were seen in supermarket and clothing stores, although that was partially offset by growth in online shopping.
In the 12 months to June, volumes fell 0.2%. The ONS said sales were 1.3% below their pre-pandemic level, in February 2020.
Erin Brookes, European retail and consumer lead at Alvarez & Marsal, said: "June has been a washout for retail sales, with retailers yet to sustain two consecutive months of sales growth this year.
"The poor weather in June saw disappointing sales of summer goods across food and clothing. This comes despite significant discounting and deflation in fashion retail, with volumes remaining stagnant."
Kris Hamer, director of insight at the British Retail Consortium, said that while poor weather had hit sales in June, retailers remained optimistic going forward.
"With the summer social season nearly in full swing, and a new government offering a fresh approach to the economy, retailers are hopeful that consumer confidence will improve and spending will pick back up."
Peter Arnold, UK chief economist at EY, said: "This data backs the EY Item Club's view that GDP is likely to be softer in June, meaning that GDP growth in the second quarter comes in slightly smaller than the first quarter's 0.7% expansion.
"The EY Item Club remains optimistic about the retail outlook for the second half and 12025. Low inflation and persistently strong pay growth are now delivering a much-needed real-terms boost to household incomes."
Dan Coatsworth, investment analyst at AJ Bell, said: "The public had plenty of distractions in June: the general election, miserable weather, the Euros and high interest rates continuing to put pressure on household finances. It's no wonder that retail sales were poor in the month."
Interest rates current stand at a 16-year high of 5.25%. But with inflation now back at the Bank of England's 2% target, the Monetary Policy Committee is widely expected to start trimming the cost of borrowing.
Analysts are split over whether the first cut will come in August or September, however.
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