June retail sales given unexpected boost

June retail sales
// Retail sales increased by 1% month-on-month in June 2019, according to ONS figures
// There was growth across all sectors, especially charity and antique retail, except grocers and department stores
// Internet sales slipped 0.7%, but they’ve increased 8% over the past 12 months

UK retail sales had an unexpected boost in June thanks to antiques and second-hand sales, according to the latest figures from the ONS.

Monthly retail sales volumes grew one per cent after May’s 0.5 per cent month-on-month drop in volumes, which was driven by unseasonably cold weather.

Year-on-year figures show a robust 3.8 per cent increase to beat all forecasts, although sales over the three months to the end of June grew by just 0.7 per cent, the weakest reading since the three months to February.

Nonetheless, while the ONS’s figures raises hopes that a downturn in the second quarter could be softer than previously expected – it goes completely against recent data from the BRC that showed retail sales suffered the worst June on record.

Separate figures from BDO also showed that high street sales suffered a “washout” in the same month.

The ONS noted that the sales uptick in June came was a result of growth in non-food stores, especially in second-hand goods in charity and antiques stores.

However, department store sales declined for a sixth consecutive month, the worst such run in records that date back to the late 1980s.

Meanwhile, month-on-month online sales slipped 0.7 per cent, but they’ve increased eight per cent over the past 12 months.

Online sales as a proportion of all retailing fell to 18.9 per cent in June 2019, from the 19.3 per cent reported in May 2019.

“Retail sales growth slowed in the latest three months as food stores saw falling sales for the first time this year and department stores continued their steady decline,” ONS head of retail sales Rian Murphy said.

“Retail as a whole saw a return to growth in the month of June, mainly due to growth in non-food stores with increased sales in second hand goods, including charity shops and antiques.”

BRC head of insights Kyle Monk said the ONS’s data has “defied” analyst predictions and the “generally reported sentiment” from retailers.

“Given that last June 2018 was such a strong trading period, it is very difficult to believe that nationally year-on-year sales rose by four per cent.

“Even if one were to trust in the optimistic outlook presented by the ONS, what is clear is that retailers continue to face disproportionate cost pressures, both through increasing business rates and uncertainty caused by Brexit.

“Policy makers now have just 22 days in Parliament to present industry with solutions before a potential no deal exit from the European Union, which will have disastrous consequences for British retail.”

Fashion Retail Academy chief executive Lee Lucas highlighted how fashion retailers’ success was making an outsized contribution to the momentum of the sector.

“They also serve as a broader bellwether for consumer confidence, and the impressive 1.5 per cent jump in sales recorded in June suggests many are brushing aside Brexit uncertainty to keep the tills ringing,” Lucas said.

“Meanwhile the shift in shoppers’ spending habits is becoming more and more apparent.

“The lesson is clear: when consumers are faced with such a huge range of choice, they tend to gravitate to brands where they feel most at home.

“For the mass-market retailers, trying to offer something for everyone is becoming increasingly difficult.”

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