Sunshine and world cup boost food sales but fear of slump real

Despite challenges, elements of the high street are succeeding
Despite challenges, elements of the high street are succeeding

Retail sales grew faster than expected in July when sunshine and the World Cup boosted food sales and shoppers took advantage of online sales and prolonged discounts on fashion.

Sales volumes rose by 0.7% on the month before to recover from June’s decrease of 0.5%, and were 3.5% higher than the same time last year, the Office for National Statistics (ONS) said.

Figures for the three months to July, which smooths out monthly volatility, show retail sales grew by 2.1% on the previous three months, the biggest increase since February 2015.

Spending online continued to increase to reach a new record proportion of all retailing at 18.2% in July, with strong growth in department stores also reaching a record proportion at 18.2%.

Online sales showed strong growth, both on the month and year-on-year at 4.9% and 16.9% respectively.

The ONS said feedback from non-store retailers suggested that online promotions further encouraged sales, while non-food stores reported a fall in footfall in July 2018.

ONS senior statistician Rhian Murphy said: “Many consumers stayed away from some high street stores in July, but online sales were very strong, supported by several retailers launching promotions.

“Food sales remained robust as people continued to enjoy the World Cup and the sunshine.”

The figures reflect a struggle on the high street for many retailers who are struggling to cope with both squeezed consumer spending and online competitors.

Department store House of Fraser was bought out of administration by Sports Direct last week and DIY chain Homebase has announced it is to close 42 stores.

Ian Geddes, head of retail at Deloitte, said: “The year-on-year boost to both volumes and values should reassure the sector.

“Success stories can be found in every sector and the future outlook is promising with evidence of reinvention and investment.

“The high street is far from dead, it is evolving.”

Rachel Lund, from the British Retail Consortium, said: “While solid sales growth is good news, the concern is that we are simply seeing the temporary expression of demand built up during the colder conditions at the beginning of the year.

“If that is the case and if we see the pace of earnings growth continue to slow, the last quarter of the year could be very tough for the retail industry.”