UK retail sales volumes jumped 1.0% mom in June, far exceeding expectations for a -0.3% mom decline, following an unrevised 1.2% mom increase in May. The stronger-than-expected performance points to resilient consumer demand despite elevated borrowing costs and persistent cost-of-living pressures. Retailers credited sales promotions and warm weather for boosting spending, particularly at online and clothing retailers.
The gains extended beyond the headline figure. Excluding automotive fuel, retail sales rose 1.1% mom, while volumes increased 1.2% qoq in Q2. Non-store retailing was the standout performer, with sales surging 4.4% mom and 3.8% qoq, reflecting strong online demand. Other non-food stores also posted solid gains, while clothing retailers rebounded 1.9% mom after recent weakness. Food sales edged higher, suggesting spending strength was relatively broad-based across consumer categories.
Fuel sales was the notable weak spot, falling -0.8% mom and 6.0% qoq as higher pump prices continued to weigh on demand following the Middle East-related stockpiling seen in March. Overall, the report suggests UK consumers remain willing to spend selectively when supported by discounts and seasonal factors, reinforcing the view that household consumption continues to provide a cushion for the economy.
Economic Data
| Indicator | Actual | Expected | Previous |
|---|---|---|---|
| Retail Sales mom (Jun) | 1.0% | -0.3% | 1.2% |
| Retail Sales ex-Fuel mom (Jun) | 1.1% | — | — |
| Retail Sales qoq (Q2 vs Q1) | 0.6% | — | — |
| Retail Sales ex-Fuel qoq (Q2 vs Q1) | 1.2% | — | — |
Category Breakdown
| Component | June mom | Q2 vs Q1 | Trend |
|---|---|---|---|
| Non-store Retailing | 4.4% | 3.8% | ▲ Strong |
| Textile, Clothing & Footwear | 1.9% | -0.1% | ▲ Rebounded |
| Other Non-food Stores | 1.8% | 1.2% | ▲ Strong |
| Food Stores | 0.3% | 0.3% | ▲ Modest |
| Household Goods Stores | -0.6% | 2.9% | Mixed |
| Department Stores | -1.7% | 1.6% | Mixed |
| Automotive Fuel | -0.8% | -6.0% | ▼ Weak |
Key Takeaways
- UK retail sales rose 1.0% mom in June, sharply beating expectations for a -0.3% decline.
- May’s 1.2% mom gain was unrevised, while April was revised up to -0.7% mom from -1.0% mom.
- Excluding automotive fuel, retail sales increased 1.1% mom, indicating that the strength was broad-based rather than driven by volatile fuel sales.
- Retail sales volumes rose 0.6% in Q2 from Q1, or 1.2% excluding fuel, pointing to resilient household spending through the quarter.
- Online retailers were the standout performer, with non-store sales jumping 4.4% mom and 3.8% qoq, helped by sales promotions and warm weather.
- Clothing retailers rebounded 1.9% mom, while other non-food stores also posted solid gains.
- Fuel sales remained the weakest segment, falling -0.8% mom and -6.0% qoq after motorists cut back following March’s conflict-driven stockpiling and subsequent rise in pump prices.
- The report suggests UK consumers continue to spend selectively despite high interest rates, reinforcing the resilience of domestic demand.
