British retail sales recovered in July with department stores and sports equipment stores boosted by summer discounts and sporting events, such as the UEFA Euro 2024, Wimbledon and the Olympics.
Retail sales volumes in the UK increased by 0.5% in July 2024, following a decline of 0.9% in wet and cold June, according to the latest data from the Office for National Statistics (ONS).
Tom Youldon, partner at McKinsey & Company, stated, “Department stores and sporting goods recorded a strong performance, with department stores seeing a more than 10% increase in online sales.
“This was likely driven by the start of summer sales and the biggest Amazon Prime Day on record appealing to value-conscious shoppers and encouraging discretionary spending on summer staples like holiday clothes and barbeques.”
In the three months to July 2024, sales volumes rose by 1.1% compared with the three months to April 2024.
Category Performance
Data showed that sales volumes in non-food stores - the total of department, clothing, household, and other non-food stores - rose by 1.4% in July, following a fall of 1.9% in June 2024.
Food store sales remained flat during the period, while in the online channel, it grew by 1%.
The overall online spending rose by 3.6% in July, compared with July 2023.
Danni Hewson, AJ Bell's head of financial analysis, commented, “Not every retailer enjoyed a mid-summer bounce back. Clothing and furniture sales were still subdued, and fuel sales were down almost 2% despite prices at the pump falling.
“There is still a degree of uncertainty hanging over the British public’s heads. Inflation is so much lower than it was, but we know fuel prices will rise this autumn and grocery prices have ticked higher this month.”
Youldon believes that many retailers will be cautiously optimistic as sales volumes increase across most categories.
“Fragile consumer confidence may be lifted as inflation continues to hover close to the 2% mark and the first cut to interest rates since 2020 starts to feed through to household budgets,” he explained.
Outlook
According to Erin Brookes, European retail and consumer lead at Alvarez & Marsal, the high street should get a boost from sunshine in August, school holidays and the Bank of England’s latest rate cut.
“The retailers that have been able to hold their nerve on not discounting too heavily early in the season, and that have accurately forecasted demand and merchandised accordingly, will come out on top,” she added.
