Figures from the Office for National Statistics (ONS) show retail sales volumes fell by 1.2% in July after consumer demand was impacted by the wet weather and cost of living crisis.
In food stores, volumes fell by 2.6%, with retailers noting that cash-strapped shoppers were continuing to make cutbacks amid soaring grocery prices.
Non-food stores saw volumes fall by 1.7% last month, following a rise of 0.6% in June. The poor weather reduced footfall on high streets and demand for items such as summer clothing.
However, it was a better month for the online channel, with volumes rising by 2.8% in July. The ONS noted that shoppers switching to online shopping because of poor weather and increased promotions led to 27.4% of retail sales taking place online last month – the highest proportion since February 2022.
Ruth Gregory, deputy chief UK economist at Capital Economics, said she was cautious about reading too much into the latest retail sales since it “had a lot to do with last month being the sixth wettest July since records began in 1836”.
But she added: “With the Bank of England’s interest rate hikes still feeding through and consumer confidence falling, we remain downbeat on the outlook for overall spending this year.”
Meanwhile, Helen Dickinson, Chief Executive of the British Retail Consortium, commented: “Retailers are hopeful that the coming months will provide a boost to spending, as England fans celebrate the Women’s Football World Cup Final this weekend, families start their back-to-school shopping and university students ready themselves for the new academic year. Nonetheless, the economic backdrop will remain difficult, and Government must find ways to create an environment that fosters economic growth.”
