The total volume of UK retail sales increased by 1% in June, driven by hot weather and the World Cup, according to the Office for National Statistics (ONS). This unexpected rise compared with a 1.2% increase in May, which was unchanged from a previous estimate. Most economists had predicted a 0.1% monthly decline.
Sports Merchandise and Online Shopping Boost
Retailers said June's hot spell and more sales promotions helped increase shopping in clothing stores and online. The ONS reported higher sports merchandise sales as retailers sold football kits for fans during the Fifa World Cup, with England and Scotland both playing in the group stages. Alcohol and tobacco sales also rose as many football fans gathered at home or at venues to watch matches.
Online shopping rebounded to a five-year high. The share of online sales reached 29.4% in June, the highest since April 2021. Non-store retailers, primarily online shops, saw sales up 4.4%.
Clothing and Seasonal Items
Clothing and footwear sales rose by 1.9% in June, the biggest monthly rise since September last year. The ONS highlighted strong sales of fans, air conditioning, and outdoor furniture. Art galleries also enjoyed more visitors, suggesting people opted for activities to keep cool. June was the second warmest on record for the UK, according to the Met Office.
Motor Fuel Sales Drop
Motor fuel sales dropped sharply over the second quarter. Retailers said motorists made fewer journeys and delayed filling tanks since April as prices rose after the start of the US-Israel's war with Iran.
Expert Caution
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. Sports merchandise also sold well online. With internet retailers faring well, the proportion of online sales has risen to its highest since spring 2021 when coronavirus restrictions were ending."
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. While the weather may have put some shoppers off heading to the high street, many simply switched to online with strong digital sales helping to maintain momentum for retailers."
Experts cautioned that consumer spending could weaken in the months ahead as cost-of-living pressures take hold. 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. Whilst the sun was shining on retailers in June, there are some dark clouds in the distance that are likely to keep a lid on sentiment for the remainder of the year."
