Retail sales jumped in June as the heatwave and heavy discounting drove Brits towards online shopping.
The volume of retail sales jumped by one per cent in June, having slowed slightly from 1.2 per cent growth in May, according to the Office for National Statistics (ONS).
Online shopping grew to the largest proportion of total retail sales since spring 2021, when the covid-19 pandemic kept Brits away from the high street.
Non-store retailing saw the biggest jump among spending sectors in June, rising 4.4 per cent, while department store sale volumes slipped by 1.7 per cent.
Sales at food stores inched up by 0.3 per cent last month, as purchases at household goods stores fell by 0.6 per cent.
Hannah Finselbach, senior statistician at the ONS, said: “Internet retailers did especially well, with business telling us that this was because of promotions and the warm weather.”
Online retailers saw huge demand for outdoor products, air conditioning and clothing, Finselbach said.
Fuel sales slip after stockpiling ends
While high demand for fuel had buoyed retail sales figures in recent months, demand for petrol and diesel has appeared to fall off a cliff in the last quarter.
Automotive fuel sales fell by 0.8 per cent in June, marking a six per cent drop over the last three months.
While motorists had been stockpiling fuel in the first few weeks of the Iran war, soaring energy prices in April kept motorists away from the pumps and demand has yet to return, the ONS said.
Inflation took a surprise drop from 2.8 to 2.6 per cent in June, dragged down by the sharp fall in fuel prices which came a few weeks ago.
But energy prices are tipped to rise again following fresh strikes between the US and Iran, including Houthi attacks on tankers in the Red Sea.
Retailers will be hoping that the heatwave and World Cup will lift sales in July too, as the higher traffic to pubs is likely to have knock-on effects on the wider high street.
Inflation could hit consumer spending
But Thomas Pugh, chief economist at RSM, warned that recent rises in oil prices could weigh on consumer spending. He said: “If those prices persist through the summer, inflation is likely to rise above 3.5 per cent, increasing the risk that the Bank of England raises interest rates.
“That would squeeze household budgets and could start to weigh on consumer spending.”
The British Retail Consortium (BRC), which represents the UK’s leading retailers, has called on Andy Burnham to cut so-called “policy costs” on energy bills for high street businesses.
Harvir Dhillon, the trade body’s chief economist, said: “To support growth and keep inflation under control, Government should address the taxes and levies that increase businesses’ energy bills.
“Otherwise, rising costs will continue to constrain investment and make it harder for retailers to keep prices low for customers in the future.”
