Online sales reached their highest share of retail spending in five years last month as record heat fuelled demand for air conditioners, outdoor products and clothing.
The Office for National Statistics (ONS) said the volume of retail sales in Great Britain rose 1% month on month in June, beating analysts' expectations of a 0.3% decline, helped by hot weather and World Cup spending.
Heatwave conditions pushed year-on-year sales up 4.2% in June, almost double analysts' expectations of 2.3%.
Online sales surge
Hannah Finselbach, a senior statistician at the ONS, said: 'With internet retailers faring well, the proportion of online sales has risen to its highest since spring 2021, when coronavirus restrictions were ending.'
After a revised 0.7% monthly fall in sales in April, two months of hot weather helped drive overall retail sales growth of 0.6% in the three months to the end of June, compared with the previous quarter.
Non-store retailers, primarily online businesses, enjoyed another bumper month, with sales soaring 4.4% in June, although down on the 6.1% growth recorded the previous month and 3.8% quarter on quarter.
Clothing and footwear boost
Clothing and footwear retailers also had a strong month, with sales rising 1.9% from May. Clothing store sales increased 1.9% month on month, the biggest rise since September.
Sales at other non-food stores – retailers that are not clothing, household goods or department stores – rose 1.8% month on month, driven by computer and telecoms retailers.
Department stores, however, reported a 1.7% monthly decline in sales after a 2.5% rise in May, when shoppers bought fans and paddling pools during the hot weather. Household goods retailers also reported weaker sales, down 0.6% month on month.
Outlook and warnings
Samuel Edwards, the head of client portfolio management at the financial services firm Ebury, said: 'Retailers scored an early summer goal in June, with retail sales outperforming expectations as warm weather, promotions and World Cup fever helped unlock consumer spending.'
While the so-called Burnham bounce and World Cup merriment had helped consumer confidence levels jump by the biggest margin for almost three years this month, Edwards warned that retailers still faced potential headwinds.
He said the higher energy price cap, persistently elevated interest rates and the inflationary pressures stemming from renewed tension in the Middle East could dent consumer confidence.
Melissa Minkow, the global director of retail strategy at CI&T, said: 'Warm weather did a lot of the work for retailers in June. July's figures will be an interesting watch, because we'll see a response to Burnham's cost of living policies come into play.'
'Consumers tend to either pull back if they expect new policies to limit their funds or spend more if they think they'll be good for their wallets.'
