Retail sales see July boost but firms warn of tough winter ahead
British retail sales rose more than expected in July, boosted by good weather and the UEFA Women’s Euros 2025 tournament.
However, extensive revisions to previous months’ data have revealed a less volatile but ultimately slower growth picture for the year.
The Office for National Statistics (ONS) today released its latest figures, showing that sales volumes in July were up 0.6 per cent from June.
This exceeded economists’ forecasts of a 0.2 per cent rise in a Reuters poll. But, the annual growth rate came in below expectations at 1.1 per cent.
The ONS explained that the release of the figures, which was delayed for two weeks, was due to the discovery of “quality failures” in its data.
The statistics body found problems aligning its survey periods with calendar months, which had previously overstated the volatility of retail sales.
James Benford, ONS director of economic statistics, said: “Our annual review of how we adjust for seasonality found that we had not adjusted figures correctly. This resulted in our previous figures overstating the monthly volatility in retail sales in the first half of the year.”
He added that “the new figures published today show a similar overall pattern of three-month on three-month growth, but with less volatile month-on-month changes”
Mixed signals for the UK high street
While the monthly figures provided some cheer for retailers, they failed to reverse a broader downward trend.
The quantity of goods bought fell by 0.6 per cent in the three months to July when compared with the previous three-month period.
This marks a clear halt to the four months of consecutive growth seen earlier in the year.
The positive monthly result was largely credited to strong performances in the non-store and clothing sectors.
Retailers attributed the rise to new products, favorable weather, and a boost from the UEFA Women’s Euros 2025 tournament.
The British Retail Consortium reported that spending at its members was up 2.5 per cent in cash terms in July, buoyed by purchases of summer clothes and food during the UK’s fifth-hottest July on record. However, the body warned of “difficult decisions’ ahead:
“Unfortunately, this level of sales growth makes little dent on the £7 billion of new costs that retailers are having to shoulder following last year’s Budget. With a date now sent for the next Budget, government must ensure that no additional tax is levied on retailers, or else many will be forced to make difficult decisions around raising prices, store closures, and jobs.”
The downward revisions to past retail sales figures will also have a knock-on effect on the UK’s GDP data, though the full impact will not be seen until the quarterly national accounts are published later this month.