ONS: Retail Sales Surprise in June

According to the ONS, retail sales for the five-week period 26 May 2019 to 29 June 2019 rose by 0.7%, with growth across all sectors except food stores and department stores.  This was a slowdown from the stronger growth of 1.6% in the three months to May 2019.

The quantity bought in June 2019 increased by 1.0% when compared with May 2019; non-food stores provided the largest contribution to this growth.

The year-on-year growth rate shows that the quantity bought in June 2019 increased by 3.8%, with growth across all sectors except department stores, while May 2019 was at 2.2% for the year-on-year growth rate.

Online sales as a proportion of all retailing fell to 18.9% in June 2019, from the 19.3% reported in May 2019.

Non-store retailing and non-food stores provided the largest contribution to the growth, with the amount spent at 1.5 percentage points and the quantity bought at 1.6 percentage points for both sectors.

In contrast, food stores were the smallest contributor to growth in the amount spent at 0.6 percentage points and provided no contribution to the quantity bought.

Deloitte Comment:

Commenting on today’s ONS retail sales figures, Ian Geddes, head of retail at Deloitte, said:

“After a damp May, retail sales were boosted in June with sales values and volumes both up month-on-month by 1.3% and 1%, respectively, and up 4.3% and 3.8% compared to the same period last year.

“June’s food sales also increased, albeit at a slower rate of 0.6% year-on-year. Whilst a cooler Spring Bank Holiday may have failed to spark the first of the year’s barbecues, sales in non-food edged up 0.7% month-on-month, boosted by the re-commerce market as antiques and charity shops attracted the growing ‘conscious consumer’. After a period of clothing sales declines, consumers have also reacted well to end-of-season discounting, with clothing sales growing by 1.5% compared to May 2019.

“Online sales, which have gradually slowed since the start of the year, fell another -0.7% this month, accounting for 18.9% of total retail sales.

“At a macro level, unemployment, interest and inflation rates have all remained low throughout the first half of the year, with household incomes consistently high. Regardless, consumer confidence has remained flat and goods purchases held off, often in favour of experiences.

“The start of summer’s high season has so far brought a bumper month for sports in women’s football, tennis and cricket, and retailers should expect a much sunnier sales forecast for the remainder of the season. Likewise, with large-scale campaign days, many high street retailers will boost their own sales through price-matched and secondary purchases.

“Retailers may not be high and dry just yet but, with the late arrival of summer sunshine, sales may just be starting to warm up.”

Source : Insight DIY Team, ONS and Deloitte

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