Retail sales grew more rapidly than expected in July, thanks to the record hot summer and the World Cup.
Sales increased by 0.7% in July – a slight recovery from June’s 0.5% decrease – and were 3.5% higher than the same time last year, figures from the Office for National Statistics show.
Figures for the three months to July showed retail sales grew by 2.1% on the previous three months, the biggest increase since February 2015.
The ONS said many consumers stayed away from high streets – but food sales remained “robust” and online sales were very strong, boosted by discounts.
Spending online continued to increase to reach a new record proportion of all retailing at 18.2% in July, with strong growth in department stores also reaching a record proportion at 18.2%.
ONS senior statistician Rhian Murphy said: “Many consumers stayed away from some high street stores in July, but online sales were very strong, supported by several retailers launching promotions.
“Food sales remained robust as people continued to enjoy the World Cup and the sunshine.”
The performance represented some hope for retailers – and the economy – after a blip for the shopping sector earlier in the year because of the poor weather.
A series of big name high street retailers have encountered trouble this year amid a spending slowdown blamed on wage growth failing to keep pace with price increases for the space of a year.
But it is expected that because that squeeze on household budgets has now disappeared, technically at least as salaries remain above the rate of inflation again, spending will cautiously start to pick up.
Ian Geddes, head of retail at Deloitte, said: “The year-on-year boost to both volumes and values should reassure the sector.
“Success stories can be found in every sector and the future outlook is promising with evidence of reinvention and investment. The high street is far from dead, it is evolving.”
Andrew Wishart, UK economist at Capital Economics, said: “Of course, retail sales only account for about a third of total household spending, so the strength of spending on the high street could be offset by households reducing their outlay elsewhere.
“Admittedly, still-weak real wage growth will weigh on consumer spending. Nonetheless, the retail sales data provides reason to think that consumer spending growth could post a slightly improved performance in the third quarter.”
Following the news, the pound remained unchanged.
Hamish Muress, currency analyst at OFX, said: “Retail sales in July have benefited from what many in the market are calling the ‘Harry Kane effect’, boosted by the good weather and the England football team reaching the knock-out stages of the World Cup.
“The reaction from the pound though has been muted, suggesting that the wider view of the UK economy is still bleak.”
From – SkyNews
