Warmer weather offers boost to retail sales in June

Retail sales grew in the three months to June 2017, with increases across all store types.

According to the latest figures from the Office for National Statistics (ONS), the quantity bought in the second quarter increased by 1.5 per cent. This follows a decline of 1.4 per cent in the first quarter of 2017.

The amount spent also saw growth, increasing by 1.6 per cent on the first quarter in Q2.

Compared with May 2017, the quantity bought rose by 0.6 per cent with non-food stores providing the main contribution.

Average store prices, including fuel, increased by 2.7 per cent on the year, following a 3.2 per cent rise in May 2017. The fall was a result of slowing fuel prices.

Online sales, which excluded fuel, increased by 15.9 per cent year on year and by 1.8 per cent on the month. Online accounted for 16.2 per cent of all retail spending.

In June 2017, the average weekly spending online reached £1.1 billion, an increase of 15.9 per cent compared with the same month last year.

The amount spent online accounted for 16.2 per cent of all retail spending, excluding fuel, compared with 16 per cent in May 2017.

Kate Davies, ONS senior statistician, said: “Today’s retail sales figures show overall growth. A particularly warm June seems to have prompted strong sales in clothing, which has compensated for a decline in food and fuel sales for the month.

“Looking at the quarterly data, the underlying trend as suggested by the three-month on three-month movement is one of growth, following a fall in quarter one, suggesting a relatively flat first half of 2017.”

Heather Barson, Fujitsu director for retail and hospitality, UK and Ireland, commented: “This uplift in UK sales is just the news retailers needed to hear after a gloomy start to the year. The sunny weather appears to have had notable impact, and so retailers should continue to find ways to keep ahead of trends so that they can meet consumers’ demands.

“While it’s positive to see spending growth increase slightly from previous months, retailers cannot get complacent. If retailers are to continue this progress, they will need to adopt new and agile tactics for attracting tomorrow’s customers. To really stand out, it’ll be more important than ever for retailers to make the in-store experience as seamless as shopping online – this is where smart use of in-store technology can come into its own.

“Our recent Forgotten Shop Floor study found that eight-in-10 consumers report that they would spend more with retailers that have a better technology offering, which means that while high-street stores hold greater opportunities than ever, those unwilling to embrace technological advancements will not reap the rewards. Retailers must be visionary in their use of tech and give shoppers what they want, before they know they want it, just as Henry Ford believed. With customers and competitors poised to move forward, those standing still face a worrying prospect – being the next generation of retailers to be pushed out of the high street for good.”

Gill Holloway, sales director of Insight UK, added: “It’s been a tough year for British retailers, so it’s great to see it’s not just the temperature that’s picked up in June. The retail landscape is an incredibly competitive and often volatile space. Life used to be simpler, customers wanted good customer service, a decent look at the products on sale and a relatively pain-free transaction. On the flipside, retailers would measure by footfall and the number of items per transaction. Now, the personalised experience online retailers are able to bring has put traditional retailers to the test.

“With this new world comes huge opportunities, and it’s data that will help struggling retailers cross the digital divide. Online natives have been born into a world where they’re able to know exactly who their audience is, how they behave on their website and even how they browse between competitors. This has challenged retailers to look for new ways to get to know their customers.

“Physical stores can offer something online will always struggle with, an experience with a real human face, and utilising data collection points in store will see them capitalise on that advantage.”