Wet weather has been blamed for a worse-than-expected fall in retail sales last month, with households in Great Britain shunning the high street to escape the sixth-wettest July on record.
Figures from the Office for National Statistics (ONS) showed that the quantity of goods bought fell 1.2% month on month, worse than average analyst forecasts of a 0.5% drop in sales volumes.
It follows a 0.6% rise in the previous month, when the hottest recorded June sparked a jump in food and furniture sales despite continued pressure on budgets, although that figure was revised down from an original 0.7% estimate.
However, the weather quickly turned, resulting in the UK experiencing 170% of the country’s average rainfall for the month and what is likely to be declared the wettest July since 2009.
Ruth Gregory, the deputy chief UK economist at Capital Economics, said we should be wary of reading too much into July’s drop, given it was likely to be a one-off in light of the soggy weather. “But with the Bank of England’s interest rate hikes still feeding through and consumer confidence falling, we remain downbeat on the outlook for overall spending this year.”
Non-food retailers reported a 1.7% drop in sales. Supermarkets took the biggest hit, down 2.6%, after clothing lines and food sales dipped.
“Retailers reported that the fall over the month was because of poor weather reducing footfall,” the ONS said. However, cost of living pressures and food prices also continued to affect sales.
Food store sales volumes were 5.1% below pre-pandemic levels.
The ONS added that consumers had switched to online shopping because of poor weather. Combined with online discounts, it meant 27.4% of retail sales took place online last month, up from 26% in June. That is the highest level since February 2022, when online sales reached 28%, but this was not enough to buoy up the total figure.
The retail figures also showed the impact of inflation, which currently stands at an annual rate of 6.8%, according to the latest figures for June. The amount of money being spent is now 16% higher than before pandemic but the volume of goods being bought is 2% less than in February 2020.
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“July’s poor weather dampened retail sales, with spend stalling in areas such as clothing and footwear and household goods,” Helen Dickinson, the chief executive of the British Retail Consortium, said.
“Weakening consumer confidence also impacted purchases of big-ticket items as customers continued to spend more cautiously, especially for computing and furniture. Meanwhile, sales for books and stationery performed better.”
She said retailers were hopeful that spending would rebound, as England fans celebrate the Women’s World Cup final this weekend, and students start their back-to-school shopping for the new academic year. “Nonetheless, the economic backdrop will remain difficult, and government must find ways to create an environment that fosters economic growth,” Dickinson said.
