July washout drags retail sales down 1.2 per cent as supermarkets and high street hit
July’s awful weather dragged down UK retail sales by 1.2 per cent, as supermarkets suffered the most from the washout with Brits not splashing cash on food and clothes.
The latest figures from the Office for National Statistics (ONS) show retail sales volumes in July went down following a small rise of 0.6 in June, which was one of the hottest months ever.
Data shows that food store sale volumes plummeted by 2.6 per cent in July, with supermarkets saying wet weather reduced spending on cheap seasonal clothes.
This comes after the UK had 170 per cent of the average rainfall in July, making it provisionally the wettest since 2009, and the sixth rainiest since 1836.
Earlier in the week there was a series of UK updates, with unemployment going up, real wage growth rising the highest amount since 2001, and inflation coming down. These factors, according to most analysts, make a 15th straight Bank of England rate hike more likely in September.
Food sales also dropped back, but retailers have indicated this may also be down to the increased cost of living and price of food.
ONS figures also outlined that non-food store sales dropped by 1.7 per cent, while automotive fuel sales rose by 0.7 per cent in July.
The biggest winner was non0store retailing sales which jumped by 2.8 per cent last month, as summer promotions and deals boosted sales for cash-strapped Brit.
The shift to online shopping was clear, with the poor weather meaning a staggering 27.4 per cent of retail sales being on the web, up 1.4 per cent from June. This is the highest since February 2022, when some pandemic restrictions were still in place.
In particular, department stores on the high street were hit with a 2.9 per cent drop in sales while clothing stores had a 2.2 per cent drop.
ONS Deputy Director for Surveys and Economic Indicators Heather Bovill said: “Retail sales fell sharply in July as poor weather impacted most sectors.
“It was a particularly bad month for supermarkets as the summer washout combined with the increased cost of living meant sluggish sales for both clothing and food.
Department store and household goods sales also dropped significantly.
“The wet weather did mean a good month for online retailing, as discounting plus consumers shopping from the comfort of their homes boosted sales.”
Great British public dealt a ‘huge blow’
Experts warned the wet weather had hit spending areas on the high street and supermarkets hardest, with Helen Dickinson, chief executive of the British Retail Consortium, commenting on “spend stalling in areas such as clothing and footwear and household goods.”
Weakening consumer confidence also impacted purchases of big ticket items as customers continued to spend more cautiously, especially for computing and furniture.”
It wasn’t all doom and gloom however, wit Dickinson saying “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.”
Danni Hewson, head of financial analysis at AJ Bell said the “Great British washout dealt a huge blow to retailers as would be shoppers shunned soggy high streets. Unseasonably wet and cold weather meant there was no need for new summer togs as people instead ferreted out winter jackets if they were brave enough to leave the house at all.
“Online retailers enjoyed something of a boost as people chose to do what little shopping they required from the comfort of their homes, but even then cost-of-living pressures were acutely apparent.
“Promotions and offers were prolific as competition for every one of our hard-earned pounds remained fierce.
“And with food inflation still stingingly high food sales were also down as the opportunity for picnics and barbecues vanished in the drizzle.
“July’s retail slump follows three positive months for the sector and there is every indication that consumers do still have cash to spend, they’re just choosing where and when to spend it very carefully.
“With ‘Barbenheimer’ offering something for everyone at the cinema and Mecca Bingo owner Rank updating markets to say they’d enjoyed a big spike in revenues since the showers began, it seems people took the opportunity to splurge on experiences rather than stuff.
“A bit more sunshine and the potential of a World Cup victory is likely to re-frame the numbers.
“Slowing retail sales would normally be seen as a sign of consumer stress, but this feels more like a weather related blip and it’s unlikely the Bank of England will give these numbers anything more than a cursory glance when it comes to next month’s interest rate decision.”