Bigger than expected drop in retail sales after July’s wet weather
Retail sales fell for only the second time this year as wet weather led to a surprise 1.2% drop, official figures show.
It’s a steep fall from growth of 0.6% in June, according to data from the Office for National Statistics (ONS).
A contraction of 0.5% had been forecast.
Growth in how much people were buying was recorded in all months this year except for March, which the Met Office said was the wettest in 40 years.
July similarly had high rainfall. Parts of the North West – including Greater Manchester and Merseyside – had their wettest-ever July.
Lancashire was the wettest, recording 234.6mm of rainfall last month. Footfall fell as a a result of the weather, the ONS said.
As a result people were drawn to online sales which grew to the highest proportion of all retail sales since the pandemic month of February 2022. Last month 27.4% of retail sales took place online, up from 26% in June.
Online promotions were also credited with the increased proportions. Amazon reported highest ever sales of its prime day deals event.
The volume of retail sales also rose overall by 2.8%, which online retailers also attributed to promotions.
People even bought less food last month. Food stores sales volumes fell by 2.6%.
Supermarkets reported the rain and rising prices reduced clothing and food sales.
Non-food stores also experienced a fall, of 1.7%, in with categories such as furniture and lighting particularly hard hit.
Retail sales figures are important as household consumption is the largest expenditure across the UK economy.
Prime Minister Rishi Sunak set himself the goal to grow the economy as part of his five promises.
The latest figures play a role in monthly economic growth figures which track UK GDP (gross domestic product).
Economist have attributed the fall to the weather, rather than inflation and the increased cost of borrowing from the Bank of England’s rate hikes.
“Admittedly, we would be wary of reading too much into the drop,” the deputy chief UK economist at Capital Economics said.
“The falls in department stores and clothing sales (which dropped by 2.9% month on month and 2.2% month on month respectively), had a lot to do with last month being the sixth wettest July since records began in 1836.”