Sunshine and World Cup bring June spending boost

UK retail sales unexpectedly rose last month as the hot weather and World Cup boosted spending on air conditioning and sports kits, official figures show.

Online shopping has also rebounded to a five-year high, according to the Office for National Statistics (ONS).

The ONS said the total volume of retail sales, which measures the quantity bought, increased by 1% in June.

This compared with a 1.2% rise in May, which was unchanged from a previous estimate.

It was also an unexpected increase for most economists who had been predicting a 0.1% monthly decline.

Retailers suggested that June’s hot spell and more sales promotions helped increasing shopping in clothing stores and online.

The ONS said sports merchandise sales were higher last month amid retailers selling football kits for fans during the Fifa World Cup, which saw England and Scotland both play in the group stages.

Sales of sports merchandise rose in June amid the World Cup (James Manning/PA)

The data also pointed to an increase in alcohol and tobacco sales during the month when many football fans were gathering at home or at venues to watch the matches.

Between April and June, retail sales are estimated to have risen by 0.6% compared with the first three months of the year, according to the ONS.

ONS senior statistician Hannah Finselbach said: “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.

“Sports merchandise also sold well online.

“With internet retailers faring well, the proportion of online sales has risen to its highest since spring 2021 when coronavirus restrictions were ending.”

The share of online sales was 29.4% in June, the highest since April 2021.

Non-store retailers, which are primarily online shops but also includes sellers like street stalls and markets, benefited from the biggest boost in June with sales up 4.4%.

Clothing and footwear sales were up by 1.9% in June, the biggest monthly rise for the category since September last year.

The ONS highlighted sales of items like fans and air conditioning and outdoor furniture selling well last month, while art galleries enjoyed more visitors suggesting people opting for activities to keep cool.

Hot spells last month made it the second warmest June on record for the UK, according to the Met Office.

On the other hand, motor fuel sales dropped sharply over the second quarter, with retailers suggesting that motorists made fewer journeys and delayed filling tanks since April as prices rose after the start of the US-Israel’s war with Iran.

Sandra Prince, head of consumer at Lloyds, said: “Warmer weather and World Cup excitement have helped deliver another positive month for retailers, encouraging spending across clothing, garden furniture and other seasonal ranges.

“While the weather may have put some shoppers off heading to the high street, many simply switched to online with strong digital sales helping to maintain momentum for retailers.

However, experts have cautioned that consumer spending could be set to weaken in the months ahead as cost-of-living pressures take hold.

Harvir Dhillon, lead economist at the British Retail Consortium, said: “While retailers have been enjoying the boost to sales, there are challenges ahead, particularly as hostilities in the Middle East resume.

“Household budgets remain under pressure, consumer confidence is fragile, and retailers are facing rising operating costs.”

Jonathan Moyes, head of investment research at Wealth Club, said: “The resumption of the Iran war in July has seen Brent crude oil touch 100 US dollars a barrel again overnight.

“This will undoubtedly weigh on consumers in the latter half of this year as inflation again begins to take its toll.

“Whilst the sun was shining on retailers in June, there are some dark clouds in the distance that are likely to keep a lid on sentiment for the remainder of the year.”