Hot weather lifts UK spending as fans and sports gear add to sales
The snapshot from the British Retail Consortium (BRC) showed total sales grew by 3.1% year on year in June, after a sharp drop in May, as record-breaking temperatures and promotional offers encouraged consumers to spend.
Official figures showed UK retail sales collapsed by 2.7% in May, the sharpest monthly decline in almost two years, in a 'dismal' month for supermarkets as the economy unexpectedly shrank by 0.1%.
However, the BRC said June's high temperatures helped to 'heat up' consumer spending. The total value of food sales rose by 4.1% year on year, although this partly reflected fast-rising food prices pushing up the cost of a supermarket shopping basket.
Helen Dickinson, the chief executive of the BRC, said: 'The soaring temperatures increased sales of electric fans while sports and leisure equipment was boosted by the weather and the start of Wimbledon.
'Food sales remained strong, though this was in part driven by food inflation, which has risen steadily over the course of the year.'
Households have come under pressure from lingering high inflation, adding to already elevated living costs, after tax rises and increases in bills. Consumer confidence has also been hit by uncertainty over sluggish growth, a cooling UK jobs market and Donald Trump's trade wars.
Separate figures from Barclays showed consumer card spending – which takes into account broader spending on hospitality and leisure alongside retail – fell 0.1% year on year in June.
Highlighting evidence of consumer caution, it said essential spending – including food and fuel – fell 2.1%.
However, the bank, which processes almost 40% of UK credit and debit card transactions, said there were signs of rising consumer confidence and willingness to spend on experiences.
The onset of summer festivals, weddings and sporting events contributed to a marginal 0.8% increase in non-essential spending, led by the strong performance of entertainment and health and beauty. Hospitality and leisure spending grew 2.1%, helped by live shows from Beyoncé and Pitbull, and huge outdoor concerts in Hyde Park.
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Spending on furniture rose sharply, reflecting new homeowners furnishing their properties after a rush to complete purchases before the expiry of a temporary cut in stamp duty in England and Northern Ireland at the end of March.
A survey of 2,000 adults by Barclays showed confidence in household finances improved by six percentage points to 73% – a four-month high.
Jack Meaning, the chief UK economist at Barclays, said: 'The economy has cooled throughout through [the second quarter], but our data does show pockets of strength.
'However, with global and domestic uncertainty, and temporarily heightened inflation likely to continue, consumers are remaining cautious and maintaining savings buffers.
'We expect this to lead to limited GDP growth for the remainder of this year, before falling interest rates and a stronger sense of certainty drive a return to growth next year.'
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