Warm weather and Oasis concerts lift retail sales in delayed ONS data
The delayed ONS retail sales figures show volumes were up 0.6% in July, driven by clothing and footwear (up 2.5%), non-store retailing (up 2.5%) and household goods (up 0.5%), however, department stores fell 1.5%.
Jacqui Baker, Head of Retail at RSM UK and chair of ICAEW’s Retail Group, comments: “The hottest summer on record combined with sporting events, concerts including two Mancunian brothers on a comeback tour, and the usual influx of overseas visitors brought good results for the retail sector. The Oasis reunion in particular provided a boost to hotels, pubs and retailers as fans kitted out in new outfits for the headline event.
“The delayed data helped to balance out some of the volatility seen in the first half of the year, but the positive trend remains intact. Retail sales have grown strongly in the last two months following the tax and tariff disruption in April.
“Despite a small dip in consumer confidence in July, overall, it appears to be ticking up. But there’s every possibility that this progress could be undone with ongoing speculation and uncertainty over tax rises in the lead up to the later than expected Budget. This uncertainty could be a big hit to the all-important Golden Quarter, which would be particularly damaging for the retail sector.
“With many retailers already at breaking point, they need to see government support rather than further tax burden placed on them. Tax measures that hit consumers’ disposable income would also have a knock-on effect on the sector, so the government must tread extremely carefully.”
Thomas Pugh, Chief Economist at RSM UK, added: “The revision to the seasonal adjustment process means the recovery in retail sales this year is a bit less impressive than we previously thought. Indeed, we had previously suggested that some of the recent volatility in retail sales was down to poor seasonal adjustment rather than swings in underlying sales. The level of retail sales in June was 0.5% lower than formerly.
“The 0.6% m/m increase in retail sales volumes suggests that the economy continued to recover in July. Combined with the tick up in consumer confidence in August, it suggests that consumers may be starting to open their wallets.
“The big question now is whether speculation about further tax rises in the budget and rising inflation will knock the recovery back in the second half of the year, in the same way that we saw in 2024.”