ONS: UK retail sales boosted by discounts and sporting events in July

UK retail sales recovered in July as department stores and sporting goods shops benefited from summer discounts and sporting events such as UEFA Euro 2024, Wimbledon and the Olympic Games.

According to the latest data from the Office for National Statistics (ONS), UK retail sales rose 0.5% in July 2024, after falling 0.9% in a wet and cold June.

Tom Youldon, partner at McKinsey & Company, said: “Department stores and sporting goods posted strong performance, with department stores reporting an increase in online sales of over 10%.”

“This is likely due to the start of the summer sales and the biggest Amazon Prime Day ever, which appeals to price-conscious shoppers and encourages discretionary spending on summer items like vacation clothes and barbecues.”

In the three months to July 2024, sales volumes increased by 1.1% compared to the three months to April 2024.

Category Performance

The data showed that sales volume at non-food stores – that is, department stores, clothing, household goods and other non-food stores – rose 1.4% in July, after a 1.9% decline in June 2024.

Sales in the food retail sector remained unchanged during this period, while they increased by 1% in the online channel.

Total online spending increased 3.6% in July compared to July 2023.

Danni Hewson, head of financial analysis at AJ Bell, commented: “Not all retailers experienced a mid-summer recovery. Clothing and furniture sales were still subdued and fuel sales fell by almost 2% despite falling prices at the pump.

“There is still a degree of uncertainty among the British population. Inflation is much lower than before, but we know that fuel prices will rise in the autumn and food prices have risen slightly this month.”

Youldon believes many retailers will be cautiously optimistic as sales increase across most categories.

“Fragile consumer confidence could strengthen as inflation continues to stagnate near the 2 percent mark and the first interest rate cut since 2020 begins to impact household budgets,” he said.

outlook

Erin Brookes, head of European retail and consumer markets at Alvarez & Marsal, said high streets are likely to benefit from August sunshine, school holidays and the Bank of England's recent interest rate cut.

“The retailers who kept their cool and avoided over-discounting at the start of the season, correctly predicted demand and presented their goods accordingly will emerge as winners,” she added.