UK retail sales in surprise July fall, but department stores rise

By

Sandra Halliday

Published
Aug 20, 2021

UK retail sales dropped last month, according to official data, which suggested many consumers were more focused on England's unexpected progress in the Euro 2020 football tournament than going shopping.

However, sales were up by 5.8% compared with their pre-coronavirus pandemic levels in February 2020, the Office for Nation Statistics said on Friday.

Retail sales volumes dropped 2.5% in July from June. Analysts had expected a 0.4% month-on-month increase in sales.

The ONS said retailers cited the combination of Euro 2020 in which England reached the final for the first time ever — and bad weather keeping shoppers at home in July.

Non-food stores reported a fall of 4.4%, driven by falls in ‘other stores’ (negative 10.1%), such as second-hand goods and computer and telecoms equipment stores. Clothing and household goods stores both reported monthly declines of 2% while department stores were the only store sector to report monthly growth (0.2%).

Surprisingly, the proportion of retail sales online increased to 27.9% in July from 27.1% in June and remained much higher than the proportion of online retail spending in February 2020 (pre-coronavirus pandemic) of 19.8%.

It was a possible sign of new nervousness among shoppers after a rise in Covid cases, as well as bad weather in Britain in much of the month.

Jacqui Baker, partner and head of retail at consultancy RSM, said: “Despite a surge of shoppers hitting the high street on Freedom Day, footfall was down in July with the ‘pingdemic’ hampering retail sales — keeping consumers at home and leaving some retailers too short-staffed to open the doors. Throw in some unseasonal weather and uncertainty around a fourth coronavirus wave as new cases hit the highest level since January 2021 and it’s no surprise that consumer confidence was knocked.”