Sunday, 22 July 2018 - About Yourcheshirebusiness | Rss

Retail Sales Slow After July Heatwave

Official spending statistics disappoint, suggesting summer sunshine was the only driving force behind the surge in sales in July.

Consumers reined in their spending in August after July's heatwave had boosted demand for food and sales of outdoor goods.

The Office for National Statistics (ONS) said retail sales volumes tumbled by 0.9% on the month.

Economists had expected an increase, given continuing good weather in August and high numbers of people taking their holidays at home in the UK.

But the fall meant the annual rate of growth slowed to 2.1% - supporting recent caution among retailers about a recovery on the high street.

Food sales - which lifted strongly in July amid the heatwave - fell 2.7% on the month, reversing the previous month's gain.

However, fashion retailers did better as sales across textile, clothing and footwear shops climbed 1.1% and department stores rose 1% month-on-month.

Internet and mail order retailing saw high growth of 30.4% compared to the same period last year, when sales were hit as consumers watched the Olympics and Paralympics.

Chris Williamson, chief economist at Markit, said: "Consumers pulled back on their retail spending after a spending spree in July, but retail sales are still trending higher at the fastest rate since mid-2007, meaning the economy looks set to have grown strongly in the third quarter."

Rising house prices, record low mortgage rates and signs of economic recovery had been thought to have given consumer spending a boost.

But economists had also warned that the July performance was unlikely to be sustainable because inflation continues to outpace wage growth.

The retail sector, which accounts for 6% of the UK economy, has largely reported improved earnings but no big names had witnessed a huge change in spending attitudes as budgets remained tough.


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