Retail sales volumes (quantity bought) are estimated to have fallen by 1.2% in June 2024, following a rise of 2.9% in May 2024, the latest ONS figures reveal.
Sales volumes fell across most sectors, with department stores and clothing retailers broadly returning to their Quarter 1 (Jan to Mar) 2024 levels.
Looking at the quarter, sales volumes fell by 0.1% in Quarter 2 (Apr to June) 2024, when compared with Quarter 1 2024, and fell by 0.2%, when compared with Quarter 2 2023.
Bogdan Toma, partner at McKinsey & Company, said: “A colder-than average June took the heat out of retail sales. Retailers may have been hopeful about some level of rebound with wage growth rising above inflation levels and major sporting events. However, retail sales volumes fell by 1.2% in June 2024 compared to the same month of last year. The April to June quarter, Quarter 2 of 2024, was flat compared to last year’s same period but also to Quarter 1 of 2024.
“All retail sectors declined in June reflecting a general stagnation of consumer spending appetite. The steeper drop of 3.4% for department stores showcases the discretionary nature of the sector. The near 10% drop in sales for the online channel of department stores is potentially affected by the weak pick-up of fashion Spring/Summer season sales, given that the UK summer has been particularly cold. It may also underline the more structural challenges facing the department store sector, with consumers turning to category specialists and scaled online pure-players.
“It will be a heated summer for UK retailers, never mind the weather. Looking ahead to the summer quarter, retailers will continue to actively compete for a probable flat demand. Holidays and the last of Summer’s big sporting events could be a double-edged sword for retail demand. Ultimately competitiveness around core proposition, including pricing and promotion, but also customer experience, assortment and availability, are what British retailers will be busy with this summer.”
Oliver Vernon-Harcourt, head of retail at Deloitte, said: “The weather was once again unkind to the retail sector, as cooler conditions than average deterred consumers from spending on the high street. This is particularly significant as last June saw the UK experience a record-breaking heatwave that supported strong spending across food and non-food categories. Seasonal and weather dependent items such as clothing and outdoor related products such as DIY and gardening continue to be the worst effected, and a traditionally unpredictable British summertime combined with high interest rates might continue to disrupt sales in these categories.
“While these retail sales results are disappointing, consumer confidence continues to rise and is now above its long-term average, returning to levels last since in 2021 when consumers emerged from the pandemic with record levels of savings. Generally, consumers appear to be feeling better about their levels of disposable income, and with a slightly more optimistic economic outlook on the horizon, a boost in spending will likely follow.”
