Heatwave and online shopping drive up retail sales in Great Britain

Online sales accounted for the highest level of retail sales in five years last month as record hot weather spurred a rush for air conditioning, outdoor products and clothing.

The Office for National Statistics (ONS) said the volume of retail sales in Great Britain grew 1% month on month in June, as the hot weather and a World Cup retail rush defied analyst expectations of a 0.3% decline.

The heatwave conditions led to year-on-year sales climbing 4.2% in June, almost double analyst consensus expectations of 2.3%.

“Internet retailers did especially well, with businesses telling us that this was because of promotions and the warm weather, with strong demand in June for outdoor products, air conditioning and clothing,” said Hannah Finselbach, a senior statistician at the ONS. “With internet retailers faring well, the proportion of online sales has risen to its highest since spring 2021 when coronavirus restrictions were ending.”

After a revised 0.7% monthly fall in sales in April, two months of hot weather fuelled 0.6% overall growth in retail sales in the quarter to the end of June compared with the first three months of the year.

Non-store retailing, primarily online retailers, enjoyed another bumper month, with sales soaring 4.4% in June, although down on the 6.1% growth recorded the previous month, and 3.8% quarter on quarter.

Textile clothing and footwear stores also enjoyed a strong month, with sales up 1.9% compared with May. Clothing stores sales rose 1.9% month on month, the largest rise since September last year.

Sales at other non-food stores, which are retailers that are not clothing, household goods or department stores, rose 1.8% month on month, fuelled by computer and telecoms retailers.

However, department stores reported a 1.7% month-on-month sales decline, having enjoyed a 2.5% rise the previous month as buyers flocked to purchase items such as fans and paddling pools as the hot weather hit the UK.

Household goods stores also reported a fall in sales, down 0.6% month on month.

“Retailers scored an early summer goal in June, with retail sales outperforming expectations as warm weather, promotions and World Cup fever helped unlock consumer spending,” said Samuel Edwards, the head of client portfolio management at the financial services firm Ebury.

While a “Burnham bounce” and World Cup merriment had helped consumer confidence levels to jump by the biggest margin for almost three years this month, Edwards said retailers faced potential headwinds.

He said factors including the rise in the energy price cap, persistently high interest rates and the inflationary risk of renewed tension in the Middle East could affect consumer confidence.

“Warm weather did a lot of the work for retailers in June,” said Melissa Minkow, the global director of retail strategy at CI&T. “July’s figures will be an interesting watch, because we’ll see a response to Burnham’s cost of living policies come into play. Consumers tend to either pull back if they expect new policies to limit their funds or spend more if they think they’ll be good for their wallets.”