ONS rains on retailers' parade as high street sales rise just 0.1% in June

More retail sales today, this time from the Office for National Statistics. The bad news is that, unfortunately, sunshine doesn't always make people spend.

by Emma Haslett
Last Updated: 30 Sep 2014

When things are going badly, retailers tend to use the weather as an excuse. Come rain or snow (usually the choice on offer), when it’s high street sales figures time, retailers point to the fact people are spending their time huddled in front of the telly, rather than splashing their cash.

Unfortunately for retailers, the last month has been pretty much ideal spending conditions: hot enough to require a new wardrobe, a revamp of the garden, rust-free barbecue equipment and associated food items, not hot enough to make everyone want to avoid public transport. Basically, it’s spending spree weather.

But that hasn’t translated to ringing tills: official statistics published this morning show retail sales in the UK increased just 0.1% in the last month, or 3.6% since last year. Alright, so they’re not falling, which is positive – but economists had expected figures closer to 0.3% and 3.9% respectively.

The problem is that, although the economy is recovering nicely, consumers seem to be getting left behind. Earlier this month, official figures showed wage growth was 0.3% including bonuses (0.7% without them) in the three months to May, while inflation is now at 1.9%, which gives a suggestion of how just much consumers are still struggling (although it’s worth pointing out the two figures aren’t directly comparable).

What’s positive is that yesterday’s figures by the CBI, which are forward-looking, showed retailers expect sales volumes to grow ‘at a stronger rate’ than they have.

So things could be about to pick up. All eyes, then, on the second-quarter GDP figure, which is due to be published tomorrow. It’s expected to hit 0.8%, which will mean that for the first time, UK economic growth has risen above its pre-crisis peak. Then we can really start to enjoy the sunshine…

Tags:
Economy Retail

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