KEY POINTS

  • The UK retail sector enjoyed solid volume growth in June, with sales up 3.0% year over year in real terms. 
  • In value terms, sales climbed by 4.4%, with strong performances recorded for grocery stores, DIY retailers and health and beauty stores. 
  • The ONS reported that total shop-price inflation moderated further, to 1.4% in June, from 1.8% in May.  

Retail Sales Growth by Sector

After a very strong May, UK retail sales posted a solid June. The grocery sector reported strong 4.9% growth, even as inflation continued to decline; food-store inflation was 1.9% in June versus 2.2% in May, the ONS reported. 

Growth in June was underpinned by very substantial increases in a few sectors, which included DIY and hardware stores, health and beauty retailers, and the traditionally volatile floor-coverings sector. 

Large clothing specialists, which make up around 90% of the clothing specialists sector, saw a modest 2.1% increase in sales. The volatile small clothing specialists segment posted a decline.

Footwear stores saw their declines deepen, according to the ONS. We think two shifts are likely contributing to this decline: first, the migration of footwear spending to Internet-only retailers; second, the casualization of footwear trends, with sports-goods stores benefitting from demand for sneakers at the expense of traditional footwear stores. 

The ONS reported that total shop-price inflation (ex automotive fuel) eased to 1.4% in June, from 1.8% in May. This compares to a peak of 3.0% in September–November 2017. At nonfood retailers, inflation fell to 0.8% in June, from 1.3% in May. At automotive fuel retailers, inflation was 11.2% in June versus 7.8% in May. 

Online Retail Sales Growth

Total Internet retail sales were up 14.8% year over year in June, versus 19.9% growth in May. In June, Internet sales grew by 12.9% at food retailers, 21.5% at nonfood retailers and 11.1% at nonstore retailers.

 


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