June retail sales disappointing as consumers cut back

UK retail sales fared better than expected last month – but only thanks to a jump in food sales over the Jubilee weekend. This was the only sector to report an increase, and experts said this has masked the impact of the wider cost of living squeeze.

Figures from the Office for National Statistics show that retail sales dipped by 0.1 per cent in June; this is compared to a 0.8 per cent decrease in May.

Sales of fuel also fell – quite a bit, by 4.3 per cent – and non-food stores, such as household goods and clothing, saw sales slump by 3.7 and 4.7 per cent respectively.

The ONS also cautioned that the general trend for sales remains in decline. Its monthly reports in the aftermath of the pandemic have shown big falls and smaller recoveries.

Said Heather Bovill, ONS Deputy Director for Surveys and Economic Indicators: “Clothing purchases dipped along with household goods, with retailers suggesting consumers are cutting back on spending due to higher prices and concerns around affordability.”

Online, the proportion of sales fell to 25.3 per cent in June, from 26.4 per cent in May. The ONS said this is “a continuation of a broad falling trend” since online’s peak in February 2021 – yet still “substantially above” the level from the previous February before the pandemic.

Helen Dickinson, Chief Executive of the British Retail Consortium, said the cost of living crunch continues to damage consumer confidence and stifle household spending.

“Discretionary spending and particularly bigger purchases were put off,” she commented. “As a result, white goods and furniture sales were particularly hard hit.

“Retailers are squeezed between higher costs and weaker demand, yet they are playing their part to help households by absorbing as many of these costs as possible, expanding their value ranges, and offering discounts for some vulnerable groups.”