July witnessed a 0.5% rise in UK retail sales, spurred by sports events and discounts.
- Following a 0.9% drop in June, the retail sector saw a recovery.
- Non-food store sales volumes increased by 1.4%, benefiting from summer sports and discounts.
- Online retail sales grew by 2.5%, aided by seasonal consumer behaviour.
- Interest rates easing offers hope, despite high living costs impacting consumer confidence.
Retail sales in the UK experienced a modest yet notable increase of 0.5% in July, attributed to heightened consumer interest driven by summer sporting events and strategic discounting, particularly in department and sporting goods stores. This uptick marked a significant rebound from June’s 0.9% decline, suggesting a positive shift in consumer behaviour.
A closer examination of the quarterly data reveals a 1.1% rise in sales volumes for the three months leading to July, compared to the preceding quarter ending in April, and marking a 0.8% year-on-year increase. In particular, non-food store sales volumes witnessed a significant 1.4% growth in July, reversing a 1.9% downturn in June, with sports-related events like the Euros playing a vital role in this recovery.
The digital retail landscape also witnessed positive trends, with online sales escalating by 2.5% in July. This increase indicates evolving consumer habits, with many opting for the convenience of online shopping during the summer season, aligning with broader industry trends.
Kris Hamer, director of insight at the British Retail Consortium, provided insights into this development, acknowledging the influence of warmer weather in bolstering sales across various categories including cosmetics, clothing, footwear, and books, as consumers geared up for their summer holidays. The ongoing challenge of high living costs continues to weigh on consumers, but the recent easing of interest rates is fostering a cautiously optimistic outlook among retailers.
Despite these positive indicators, the retail sector faces challenges, predominantly stemming from inflationary pressures. As the industry anticipates the upcoming Autumn Budget, there is a highlighted concern over the potential for increased business rates, which could impact retail profitability. Hamer reflects retailer sentiments, expressing a desire to conclude the extended period of business rates hikes that have escalated by 30% under Conservative governance, impacting store viability nationwide.
In summary, July’s retail sales figures reveal a promising yet cautious optimism for recovery, driven by strategic discounting and seasonal sports events.
