ONS: Retail Sales See Moderate Growth In July

The ONS has published retail sales data for July, covering the period 30 June 2024 to 27 July 2024. 

• Retail sales volumes (quantity bought) are estimated to have risen by 0.5% in July 2024, following a fall of 0.9% in June 2024 (revised up from a 1.2% fall in our previous publication). 
  
  
• Volumes rose by 1.4% over the year to July 2024, after poor weather impacted sales in July 2023. When compared with their pre-coronavirus (COVID-19) pandemic level in February 2020 volumes were down 0.8%.
  
  
• More broadly, there was a 1.1% rise across the three months to July 2024 when compared with the three months to April 2024, and a 0.8% rise when comparing with the same period last year. 
  
  
• Non-food stores sales volumes, the total of department, clothing, household, and other non-food stores, rose by 1.4% in July 2024. This follows a fall of 1.9% in June 2024. Department stores and sports equipment stores grew strongly with retailers suggesting that summer discounting and sporting events, such as the European football Championship, boosted sales.
  
  

• Non-store retail sales volumes rose by 0.7%, mainly because of a rebound from retailers other than mail order (such as stalls, markets, vending machines and door-to-door sales).

• Automotive fuel sales volumes fell by 1.9% during July 2024 following an increase of 2.2% in June 2024. This was despite our Consumer price inflation, UK: July bulletin reporting that the average price of petrol fell by 1.4 pence per litre between June and July 2024, to stand at 144.4 pence per litre. Diesel prices fell by 1.1 pence per litre in July 2024, to stand at 150.4 pence per litre.

• The amount spent online, known as “online spending values”, rose by 2.5% during July 2024, and by 3.6%, compared with July 2023.

• Total spend, the sum of in-store and online sales, rose by a more moderate 0.7% over the month. The proportion of sales made online increased from 27.4% in June 2024 (revised up from 27.1%) to 27.8% in July 2024.

Commentary

BRC:

Responding to the latest ONS Retail Sales Index figures, which showed sales up 2.2% by value, and up 1.4% by volume, Kris Hamer, Director of Insight at the British Retail Consortium, said: 

“Following the gloomy start to summer spending, retailers welcomed the warmer July weather which gave sales growth a boost, particularly in areas such as cosmetics, clothing, footwear, and books as consumers prepared for their summer holidays. Computing also sold well as people upgraded their home office tech purchases. Meanwhile, homeware and furniture performed badly, as people concentrated their spending on summer experiences. The high cost of living is still bearing down on consumers, but with interest rates finally easing, retailers are hopeful that this will buoy consumers confidence, and with it greater spending, particularly as we head into August.”

“Retailers are working closely with Government to maximise the industry’s contribution to economic growth. But, with headline inflation showing signs of rising further, retailers face the prospect of another large rise in business rates next year. As retail businesses plan their investment strategies, many will be looking ahead to the Autumn Budget, keen to end 14 years of Conservative business rates rises which has seen the tax rate rise 30%, harming the viability of many retail stores across the country.”

PwC UK:

Commenting on the Office of National Statistics retail sales index for July 2024, Kien Tan, Senior Retail Adviser at PwC UK, said: 

"After unseasonably cool weather caused the washout of June’s results, retail sales in July recovered somewhat, as expected, with the volume of goods sold excluding petrol rising by 1.4% compared with last year - a 0.7% improvement on the previous month. In pound note terms, this translated into a 2.2% increase in retail sales compared with last July.

Not surprisingly for a month bookended by the end of the Euros and the start of the Olympics, sporting and audio-visual goods all outperformed, and grocery sales recovered. However, sales for most other categories of retail remained sluggish.

The mini-heatwave in the last week of the month came too late for fashion retailers eager to clear summer season’s stock, with sales volumes declining in this category for the 11th month in a row. And despite improving consumer sentiment and an interest rate cut, shoppers remained cautious around household and other bigger ticket purchases.

The poorer weather at the start of the month also meant lower high street footfall and helped online sales rise to 27.8% of all retail sales - the highest penetration of online for over two years.

Despite perhaps a disappointing performance for parts of the retail sector in July, we do expect further recovery in the short-to-medium term. The summer weather finally reaching the country this month will be better news for grocery and fashion; and the more favourable economic backdrop of higher wages, lower inflation and lower interest rates augur well for spending more widely in the run-up to Christmas."

Source : ONS, BRC and PwC

Image : shutterstock / 1137631598 / William Barton

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