Fuel promotions boost retail sales

 

A glut of promotions on petrol and high levels of discounting on the high street helped drive a surprise rise in retail sales in July.

Retail sales volumes rose 0.3% between June and July, the Office for National Statistics (ONS) said, defying expectations of a 0.1% fall.

And the figure for June was revised significantly higher to 0.8% from a previous estimate of 0.1% after additional information was received from retailers.

Strong fuel sales were the main driver of growth as supermarkets put on special offers to boost trade, while sales volumes excluding fuel were flat despite the ongoing discounting on the high street but this was still better than the 0.2% fall expected in the City.

The period covered the first two days of the Olympics but the ONS said this had no noticeable impact on sales.

Meanwhile, there was welcome news for hard-pressed consumers after the ONS said shop price inflation slowed to 0.2% in July, its lowest rate since October 2009.

Economists had feared that sales volumes would be weaker in July amid anecdotal evidence that retailers had been forced to bring traditional summer sales forward to June in a bid to boost trade amid the wash-out start to the summer.

But the figures suggest that continued discounting and improved weather in the second half of July helped boost trade.

Vicky Redwood, UK economist at Capital Economics, said: "The latest UK retail sales figures are pretty good - as much for the upward revisions to past months as for July's figure.

"What's more, sales should maintain this recent positive momentum in the near term as the boost from the Olympics comes through."

She believes August's figures will benefit from the feel-good factor around Team GB's success but fears sales may slow again later in the year.

The big upward revision to June's data brings it more in line with industry reports which suggested that retailers benefited from the celebrations surrounding the Queen's Diamond Jubilee.

The revision means that retail sales volumes fell 0.3% in the second quarter of 2012, up from the previous estimate of 0.7%.

But because retail is only a small part of the economy, this is not expected to have a significant impact on the reading for GDP in the second quarter of 2012, which shrank by 0.7%, according to preliminary estimates.

Food retailers saw a 0.4% increase in sales volumes in July although non-food stores continued to suffer, with volumes down 1.8% on the previous month.

The strong growth of internet sales continued, with sales up 14% on the previous year to over £500 million. The internet now accounts for 8.5% of all retail sales excluding fuel.

British Retail Consortium director general Stephen Robertson said sales growth slowed between June and July as the sector failed to receive a pre-Olympics boost.

He said: "July was no golden month for retailers despite the build-up to the Olympics.

"We'll need to see August's figures for the full picture. But with disposable incomes still under pressure and with inflation sneaking back up, underlying conditions remain challenging for the sector."

PA

Start your day with The Independent, sign up for daily news emails
ebooks
ebooksAn introduction to the ground rules of British democracy
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
SPONSORED FEATURES
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Recruitment Genius: Telesales Executive - OTE £25,000

£13000 - £25000 per annum: Recruitment Genius: Would you like to be part of a ...

SThree: Trainee Recruitment Consultant

£20000 - £25000 per annum + competitive: SThree: Are you passionate about sale...

Ashdown Group: Graduate Developer (Trainee) - City, London

£25000 per annum + benefits: Ashdown Group: A large financial services company...

Ashdown Group: Marketing Assistant - Financial Services Sector - London

£20400 per annum: Ashdown Group: An established and highly reputable organisat...

Day In a Page

The Silk Roads that trace civilisation: Long before the West rose to power, Asian pathways were connecting peoples and places

The Silk Roads that trace civilisation

Long before the West rose to power, Asian pathways were connecting peoples and places
House of Lords: Outcry as donors, fixers and MPs caught up in expenses scandal are ennobled

The honours that shame Britain

Outcry as donors, fixers and MPs caught up in expenses scandal are ennobled
When it comes to street harassment, we need to talk about race

'When it comes to street harassment, we need to talk about race'

Why are black men living the stereotypes and why are we letting them get away with it?
International Tap Festival: Forget Fred Astaire and Ginger Rogers - this dancing is improvised, spontaneous and rhythmic

International Tap Festival comes to the UK

Forget Fred Astaire and Ginger Rogers - this dancing is improvised, spontaneous and rhythmic
War with Isis: Is Turkey's buffer zone in Syria a matter of self-defence – or just anti-Kurd?

Turkey's buffer zone in Syria: self-defence – or just anti-Kurd?

Ankara accused of exacerbating racial division by allowing Turkmen minority to cross the border
Doris Lessing: Acclaimed novelist was kept under MI5 observation for 18 years, newly released papers show

'A subversive brothel keeper and Communist'

Acclaimed novelist Doris Lessing was kept under MI5 observation for 18 years, newly released papers show
Big Blue Live: BBC's Springwatch offshoot swaps back gardens for California's Monterey Bay

BBC heads to the Californian coast

The Big Blue Live crew is preparing for the first of three episodes on Sunday night, filming from boats, planes and an aquarium studio
Austin Bidwell: The Victorian fraudster who shook the Bank of England with the most daring forgery the world had known

Victorian fraudster who shook the Bank of England

Conman Austin Bidwell. was a heartless cad who carried out the most daring forgery the world had known
Car hacking scandal: Security designed to stop thieves hot-wiring almost every modern motor has been cracked

Car hacking scandal

Security designed to stop thieves hot-wiring almost every modern motor has been cracked
10 best placemats

Take your seat: 10 best placemats

Protect your table and dine in style with a bold new accessory
Ashes 2015: Alastair Cook not the only one to be caught in The Oval mindwarp

Cook not the only one to be caught in The Oval mindwarp

Aussie skipper Michael Clarke was lured into believing that what we witnessed at Edgbaston and Trent Bridge would continue in London, says Kevin Garside
Can Rafael Benitez get the best out of Gareth Bale at Real Madrid?

Can Benitez get the best out of Bale?

Back at the club he watched as a boy, the pressure is on Benitez to find a winning blend from Real's multiple talents. As La Liga begins, Pete Jenson asks if it will be enough to stop Barcelona
Athletics World Championships 2015: Beijing witnesses new stage in the Jessica Ennis-Hill and Katarina Johnson-Thompson heptathlon rivalry

Beijing witnesses new stage in the Jess and Kat rivalry

The last time the two British heptathletes competed, Ennis-Hill was on the way to Olympic gold and Johnson-Thompson was just a promising teenager. But a lot has happened in the following three years
Jeremy Corbyn: Joining a shrewd operator desperate for power as he visits the North East

Jeremy Corbyn interview: A shrewd operator desperate for power

His radical anti-austerity agenda has caught the imagination of the left and politically disaffected and set a staid Labour leadership election alight
Isis executes Palmyra antiquities chief: Defender of ancient city's past was killed for protecting its future

Isis executes Palmyra antiquities chief

Robert Fisk on the defender of the ancient city's past who was killed for protecting its future