UK retail sales fell backwards year on year in June as damp weather hit consumer spending during the month. UK total retail sales decreased by 0.2% in the five weeks to 29 June, against a growth of 4.9% in June 2023. Despite the fall, this was an improvement on the three-month average decline of 1.1%.
Over the three months to June Food sales increased 1.1% year on year against a growth of 9.8% in June 2023. Non-food sales decreased 2.9% year on year, against a growth of 0.3% in June 2023. In-store non-food sales decreased 3.7% year on year, against a growth of 2.0% in June 2023, while online non-food sales decreased by 0.7% year on year in June from a 1% decline in June 2023.
Retail sales performed poorly in June as the cooler weather during the first half of the month dulled consumer spending. Sales of weather-sensitive categories such as clothing and footwear, as well as DIY and gardening, were hit particularly hard, especially compared to the surge in spending during last June’s heatwave. Electronics sales had a better month as football fans cheering on their national teams upgraded their home entertainment systems and people replaced their pandemic purchases. Retailers remain hopeful that as the summer social season gets into full swing and the weather improves, sales will follow suit.
Despite pressure on household finances easing, with petrol and energy costs and shop price inflation all continuing to fall, consumers remain incredibly reluctant to take the brakes off their spending. The stimulus of good weather, Wimbledon and Euro 24, which was hoped would drive consumer spending, has so far failed to materialise and financial concerns remain with many households.
Retailers, who are running to stand still now, having exhausted all the levers they have at their disposal to cut costs and drive sales via promotions, will be looking to the new government to boost the economy and confidence. The overall economic conditions may slowly be improving, but the health of the sector remains fragile, and action is needed now to help support this vital economic contributor – particularly around neglected areas such as business rate reform.