Hot weather and summer promotions helped lift UK retail sales in June, with online shopping rebounding to a five-year high, according to the Office for National Statistics (ONS).
The total volume of retail sales increased by 1% in June, compared with a 1.2% rise in May, which was unchanged from a previous estimate. The increase was unexpected for most economists, who had predicted a 0.1% monthly decline.
Online sales hit highest level since 2021
The proportion of online sales rose to 29.4% in June, the highest since April 2021 when coronavirus restrictions were ending. ONS senior statistician Hannah Finselbach said: “Internet retailers did especially well, with businesses telling us that this was because of promotions and the warm weather, with strong demand in June for outdoor products, air conditioning and clothing.”
Non-store retailers, primarily online shops but also including street stalls and markets, saw sales up 4.4% in June.
Clothing and sports sales benefit from World Cup and heat
Clothing and footwear sales rose 1.9% in June, the biggest monthly rise for the category since September last year. Retailers suggested that June’s hot spell and promotions helped boost shopping in clothing stores and online. Sports sales were also higher, with increased alcohol and tobacco sales during early matches of the FIFA World Cup.
Sales of items like fans, air conditioning, and outdoor furniture sold well, while art galleries enjoyed more visitors as people sought cool activities. June was the second warmest on record for the UK, according to the Met Office.
Motor fuel sales drop amid rising prices
Motor fuel sales dropped sharply over the second quarter, with retailers suggesting motorists made fewer journeys and delayed filling tanks since April as prices rose after the start of the US-Israel conflict with Iran.
Sandra Prince, head of consumer at Lloyds, said: “Warmer weather and World Cup excitement have helped deliver another positive month for retailers, encouraging spending across clothing, garden furniture and other seasonal ranges.”
Caution ahead for consumer spending
Between April and June, retail sales rose 0.6% compared with the first three months of the year, according to the ONS. However, experts warned that consumer spending could weaken in the months ahead due to cost-of-living pressures.
Harvir Dhillon, lead economist at the British Retail Consortium, said: “While retailers have been enjoying the boost to sales, there are challenges ahead, particularly as hostilities in the Middle East resume. Household budgets remain under pressure, consumer confidence is fragile, and retailers are facing rising operating costs.”
Jonathan Moyes, head of investment research at Wealth Club, said: “The resumption of the Iran war in July has seen Brent crude oil touch 100 US dollars a barrel again overnight. This will undoubtedly weigh on consumers in the latter half of this year as inflation again begins to take its toll.”
