June retail sales experienced a decline due to multiple factors impacting consumer spending.
- Retail sales fell by 1.2% in June, with textile, clothing, and footwear sales decreasing by 1.6% according to ONS figures.
- Election uncertainty, poor weather, and reduced footfall were cited as key contributors to the decline in sales.
- Despite a previous increase in May, the quarter saw a 0.5% fall in non-food store sales, and online sales for textiles, clothing, and footwear dropped by 5.4%.
- Average regular earnings growth in the UK slowed, while inflation indicators presented mixed results, affecting consumer purchasing power.
Retail sales experienced a contraction of 1.2% in June, as reported by the Office for National Statistics (ONS). In particular, sales within the textile, clothing, and footwear sector fell by 1.6%, suggesting a cooling off in consumer demand in these areas. The ONS highlights several reasons for this downturn, notably citing uncertainties linked to the election, unfavourable weather conditions, and a resultant decrease in footfall as significant factors.
When observing the quarterly trends, retail performance showed a decline as well. A 0.5% reduction in non-food store sales volumes was recorded when comparing the periods of April to June with January to March 2024. Highlighting the challenges facing retailers, a notable 5.4% drop in online sales was seen within the textile, clothing, and footwear domains during the same timeframe.
This decline follows a previous upswing in May when retail sales increased by 2.9%. Despite this brief period of growth, the overall picture for the quarter indicates challenges persisting in the retail sector, compounded by external economic factors, contributing to fluctuating consumer confidence and spending behaviours.
Economic indicators further illustrate a complex environment. The UK’s average regular earnings growth has slowed to 5.7% in the three months leading to May. Concurrently, the employment landscape revealed little change, with an unemployment rate steadied at 4.4%. However, a reduction in job vacancies by 30,000 in the quarter to June underscores ongoing labour market adjustments.
Inflationary trends provide a mixed insight into economic conditions. While the Consumer Price Inflation (CPI) maintained its position at 2%, a slight drop in food inflation to 1.5% occurred. Kris Hamer from the British Retail Consortium (BRC) remarked on the benefits to households from decreasing inflation rates, pointing out the decline in prices across food, clothing, and footwear due to competitive pressures and a stronger currency.
The interplay of economic factors, including election impacts and inflation fluctuations, continues to challenge the retail sector.
