Hot weather helps UK retail sales rebound in June

Non-food items particularly drove sales, offsetting declines across food and fuel

The quantity of goods sold in stores and online rose by 0.6 per cent in June (Daniel Lynch)

UK retail sales grew faster than expected last month, helped by sales of summer clothes as the country was treated to unusually hot weather.

According to figures from the Office for National Statistics, the quantity of goods sold in stores and online rose by 0.6 per cent in June, beating economist forecasts and following a fall of 1.2 per cent in May.

Non-food items particularly drove sales, offsetting declines across food and fuel, suggesting that consumers are still willing to spend – even on non-essential items – despite the squeeze of rising inflation.

Average store prices increased by 2.7 per cent on the year, after a rise of 3.2 per cent in May, a fall that the ONS attributed to declining fuel prices.

Data earlier this week showed the UK’s inflation rate had unexpectedly slowed to 2.6 per cent in June from a near four-year high of 2.9 per cent in May, driven largely by lower prices at petrol pumps.

The UK enjoyed the hottest temperatures since 1976 last month, with temperatures regularly tipping above 30C.

On Monday, data from consultancy Springboard showed that high street footfall in June rose 0.9 per cent on the previous year’s figure.

Some analysts said that spending on clothing may also have been linked to the Muslim Eid festival.

Spending on clothes meant that sales at department stores increased by 2.7 per cent. Sales of household goods rose by 3.3 per cent. Food sales decreased by 0.5 per cent.

“Clothing is one of the main sectors affected by weather, where unseasonal weather [affects] sales more than seasonal weather. However, the relatively recent poor performance in this industry has meant that the warmer summer weather in June 2017 has had a positive effect,” the ONS said.

The pound broke above $1.30 on Thursday after the figures were released, but economists and strategists said that Brexit would likely remain a headwind.

“While June’s numbers may appear strong, retailers will need to remain cautious,” said Ian Geddes, head of retail at Deloitte.

“This week we saw inflation decline slightly to 2.6 per cent, the first fall in the rate since October last year. While this may offer a glimmer of hope to consumers, many retailers will likely assume it is a blip, and will acknowledge that we have yet to reach the peak of inflation.”

Andrew Sentance, senior economic adviser at PwC, said the volume of retail sales has been “quite volatile from month to month over the first half of this year”.

“There was a recovery in June from a disappointing May, perhaps supported by warmer weather,” he explained. “But, over the past three months, the level of retail spending adjusted for inflation is no higher than it was in the final quarter of last year.”

A second quarter reading for UK gross domestic product growth is due to be released on 26 July.