UK retail sales fell 0.5 per cent in July as the prolonged heatwave and an earlier start to summer promotions impacted fashion and non-food spending.

The drop followed a revised 0.7 per cent increase in June, when warm weather, discounting and the World Cup helped drive shoppers to stores and online, according to the Office for National Statistics.

Sales volumes were still 1.6 per cent higher than July last year, although growth came in below economists’ expectations.

Non-food sales dropped 1.3 per cent during the month, with clothing retailers among those reporting weaker trading.

The ONS said many fashion businesses had brought promotions forward into June, while the particularly hot weather also reduced footfall during July. The proportion of discounted clothing products subsequently fell between June and July.

Household goods retailers also suffered a slowdown following stronger sales in May and June, as furniture businesses reported that the heatwave dampened demand for some products.

Department stores were hit by stock availability issues, while non-store retailers also recorded a monthly decline as promotional activity shifted into the previous month.

Supermarkets boosted by World Cup and hot weather

Food retailers proved more resilient, with supermarket sales increasing as the hot weather and the World Cup boosted demand.

Alcohol and drinks retailers also performed strongly, helped by promotions, warmer conditions and the football tournament.

Despite July’s decline, the wider picture remained positive, with retail sales volumes rising 1.1 per cent in the three months to July compared with the previous three-month period and three per cent against the same period last year.

ONS chief economist Grant Fitzner said sales had grown across almost every major retail category over the latest three months, with hot weather helping demand for outdoor goods, fans, clothing and online sports merchandise.

Online spending also fell sharply month on month, dropping 3.9 per cent in July after rising 2.5 per cent in June. However, ecommerce sales remained 6.5 per cent ahead of last year.

The proportion of total retail sales made online slipped from 29.2 per cent in June to 28.3 per cent in July.

The figures come as consumer confidence shows signs of improving, with GfK’s closely watched index climbing to a two-year high in August, although retailers continue to face pressure from higher household energy costs and inflation.

The mixed backdrop has already been reflected across the sector, with Next recently lifting its full-year profit forecast following stronger warm-weather trading, while JD Sports issued a profit warning amid weaker performance in its US business.

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