UK retail sales volumes fell -0.5% m/m in July, matching expectations, after June growth was revised down from 1.0% to 0.7%. May was revised slightly higher to 1.3%. On an annual basis, sales growth slowed from a revised 3.8% to 1.6%, missing expectations for 2.2%. Despite July’s setback, volumes were still up 1.1% in the three months to July compared with the previous three-month period.
Weakness was concentrated in non-food categories. Non-food store sales fell 1.3%, with clothing, household goods and department stores all softer. Retailers said earlier promotions had pulled some demand forward into June, while hot weather reduced footfall and weighed on demand for certain products. Non-store retailing also fell back after a promotion-heavy June, although volumes remained above May levels. Food stores provided some offset, helped by hot weather and World Cup-related demand for supermarket goods, alcoholic drinks and beverages.
Overall, July looks more like a payback after a strong June than a sharp deterioration in consumer spending. Sales volumes remained at their second-highest level since April 2022, while the positive three-month trend suggests underlying consumption is still holding up despite weaker monthly momentum.
Data Summary
| Indicator | Actual | Expected | Previous |
|---|---|---|---|
| Retail Sales m/m | -0.5% | -0.5% | +0.7% |
| Retail Sales y/y | +1.6% | +2.2% | +3.8% |
| Retail Sales, 3m/3m | +1.1% | — | — |
| Non-Food Store Sales m/m | -1.3% | — | — |
June monthly growth was revised from +1.0% to +0.7%. June annual growth was revised from +4.2% to +3.8%.
Key Takeaways
- UK retail sales volumes fell 0.5% m/m in July, matching expectations after June growth was revised down to 0.7%.
- Annual growth slowed from a revised 3.8% to 1.6%, missing expectations for 2.2%.
- Broader trend remained firmer than monthly headline. Sales volumes rose 1.1% over three months to July compared with previous three months.
- Non-food store volumes fell 1.3%, with weakness in clothing, household goods and department stores.
- Earlier promotions brought some spending forward into June, making July decline partly a timing effect rather than clear deterioration in demand.
- Hot weather also weighed on clothing footfall and some furniture demand.
- Food-store volumes rose, helped by hot weather and World Cup-related spending.
- Total retail volumes remained at their second-highest level since April 2022, supporting view that July was a pullback after strong May and June rather than start of a sharp consumer downturn.
