The ONS' retail sales figures for June 2018, published this morning, state the “strongest three-month-on-three-month growth since May 2001” – yet, looking further into the figures, accountancy firm Wilkins Kennedy points out that June was down – admittedly off the back of a strong April and May.
Phil Mullis, partner and head of Retail and Wholesale at Wilkins Kennedy, says: “Despite reports of some of the strongest growth in the sector since 2001, the figures from the previous two months, April and May, made up for sluggish growth from Q1 2018.
"June 2018 saw a reduction against May. Exceptionally good weather and the start of the World Cup gave a boost for food but non-food suffered.
“Even though the sector may benefit from this event, a potential boost in sales does not quite translate into sustained growth. A number of retailers continue to reduce their high street presence, in particular, both Mothercare and The Original Factory Shop, via CVA. In addition, we have seen the discount chain, Poundworld, fall into administration. Retail is fiercely competitive and, arguably, over-supplied, and drops in footfall are biting into store estates.
“We also have to consider the overall backdrop of the economy. Wage growth over inflation is positive, but people are still feeling the squeeze. That might be why some of the latest retail sales figures show a boost in some areas, such as grocery, and not others – simply because people are choosing more wisely where they spend any spare cash.
“We hope to see growth during July from the knock-out stages of the World Cup – particularly as consumers enthusiastically backed England through the final stages. Let’s hope this has a positive impact on the figures, but more needs to be done to ensure any growth is sustainable.”
The statistics showed that in the three months to June 2018, the quantity bought in retail sales increased by +2.1% – the largest increase since February 2015 – with growth across all main sectors.
While hot weather and World Cup celebrations increased food store sales, it was suggested by retailers that these factors resulted in a decrease in footfall in non-food stores – which, along with non-store retailing, resulted in a monthly decline of -0.5% in the quantity bought.
Online sales as a total of all retail remained unchanged at 18%.