Sales in Great Britain slumped by 1.2 per cent last month as shoppers seemed reluctant to spend despite a fall in inflation, higher wages and lower social security contributions.
Retailers blamed poor weather, cost of living pressures, and pre-election uncertainty for customers’ reticence to spend.
New figures from the Office for National Statistics revealed the quantity of goods sold fell in June compared with May.
Sales dropped across most sectors, and were down 2.1 per cent at non-food stores, while supermarkets and other food stores posted a 1.1 per cent decline. Only petrol and fuel sales showed an increase, up 2.1 per cent.
Over the year to June, volumes fell by 0.2 per cent, and they were 1.3 per cent below their pre-pandemic level in February 2020.
Grant Fitzner, ONS chief economist, said department stores, clothing shops and furniture stores were the biggest contributors to the fall. “Retail sales fell back from May’s recent high point with falls across all main shop types, with the exception of petrol stations.
“Across the second quarter as a whole, retail fell very slightly with notable falls in supermarket and clothing store sales, partially offset by growth in online stores.”
Lisa Hooker, PwC’s consumer markets expert, said: “It appears that the cooler, wetter weather over spring and early summer, combined with longer-term uncertainty in the period prior to the general election, has discouraged shoppers from both buying seasonal goods and making longer-term big ticket purchases.
“Online was about the only winner, increasing sales compared to last June, albeit penetration fell from 27.5% to 27.1% compared with May.”
Clothing sales have fallen every month since last autumn, explaining some of the heavy discounting and earlier sales that shoppers are now enjoying, as retailers rush to clear seasonal stock, she said.
Jacqui Baker, head of retail at RSM UK, said retailers would be disappointed to see May’s bounceback in retail sales was short-lived, with election uncertainty and poor weather pushing sales volumes back in the red in June.
This came despite several major events that can usually be relied on to boost consumer actitivty, including the Euros and a host of music festivals and major gigs.
“Despite continued improvement in consumer confidence, sadly, this failed to translate into sales as a reluctance to spend took over. Not even Taylor Swift’s UK tour and Glastonbury were able to provide a boost in clothing sales. The hope is that there are more positive months to come, helped by better weather and various sporting events.”
Erin Brookes, at consulting firm Alvarez & Marsal, added: “Unfortunately June has been a washout for retail sales, with retailers yet to sustain two consecutive months of sales growth this year, with another slowdown after an uptick in May.
“The poor weather in June saw disappointing sales of summer goods including across food and clothing. This comes despite significant discounting and deflation in fashion retail, with volumes remaining stagnant.
“With tourism to potentially offer some sales uplift over the summer, retailers must look ahead and plan activities for the back half of the calendar year to ensure performance.”
Kris Hamer, at the British Retail Consortium, said: “With the summer social season nearly in full swing, and a new Government offering a fresh approach to the economy, retailers are hopeful that consumer confidence will improve, and spending will pick back up.
“The King’s Speech laid the foundations for a more modern and dynamic British economy, and retailers look forward to working closely with Government to maximise the industry’s contribution. This includes greater investment in skills and training, and using reforms to planning laws to create thriving town and city centres.”