Sales had been anticipated to say no, by 0.5%, after a robust June wherein gross sales climbed, as a result of heavy rainfall through the month. But the fall was much worse than expected , suggesting that greater rates of interest and persevering with inflation are having a notable impact as properly.
Last month was the sixth-wettest July in UK historical past.
ONS Deputy Director for Surveys and Economic Indicators Heather Bovill mentioned: “Retail sales fell sharply in July as poor weather impacted most sectors.
“It was a particularly bad month for supermarkets as the summer washout combined with the increased cost of living meant sluggish sales for both clothing and food. Department store and household goods sales also dropped significantly.
“The wet weather did mean a good month for online retailing, as discounting plus consumers shopping from the comfort of their homes boosted sales.”
The decline will elevate fears that the resilient-so-far UK financial system might nonetheless slide right into a recession earlier than the 12 months is over. GDP had held up strongly to the battering of repeated rate of interest hikes within the first half of the 12 months, and organisations from the financial institution of England to the IMF and the CBI all modified their projections to not predict a recession.
But the autumn suggests that there’s nonetheless a danger of GDP falling within the third and fourth quarter of the 12 months, which might meet the technical definition of a recession: two consecutive quarters of decline.
Josh Graham, Co-Founder and Chief Marketing Officer at Airtime Rewards, mentioned: “Today’s retail sales figures show that shoppers are prioritising financial resilience over spending, as rising interest rates prompt them to tighten their purse strings. Add to this the wet weather which dampened demand for summer clothing, and it’s hardly surprising we’ve seen retail figures slump. Our own data shows that spending in July was down 10%, with bars and offline clothing impacted most notably.
“Stubbornly high inflation and rising interest rates are testing consumers’ ability to spend, and retailers must brace themselves for scarcer spending. Having a clear value proposition that focuses on the wants and needs of customers, as well as a multi-channel approach, will be critical to attracting and retaining shoppers.”
Erin Brookes, European Retail and Consumer Lead at Alvarez & Marsal, mentioned: “The slump in sales last month could become a trend if the High Street is not boosted by tourists in August or shopping for the new season in September. Retailers need to ensure they are managing stock levels as much as possible and looking ahead with caution as preparations for peak trading pick up pace.”
