Retail sales surge back in June to within 0.6 per cent of pre-pandemic levels

In what is being described as the most positive recovery indicator we have seen so far, UK retail sales surged by 13.9 per cent in June following a more earnest reopening of the economy.

When taken together with volumes recorded in May, the June data has brought total sales back to a similar level as before the pandemic. As it stands, sales are now just 0.6 per cent lower than in February.

The 13.9 per cent month-on-month rebound reported by the Office for National Statistics (ONS) is well in excess of the 8 per cent uptick forecast by economists.

It seems that the reopening of non-essential retail shops on June 15 has made a big impact on volumes, however, there is a mixed picture for different store types.

Fuel sales, for example, grew by 21.5 per cent in June but remained far below pre-pandemic levels. Non-food stores saw a stronger improvement of 45.5 per cent but are still 15 per cent lower than February.

This is in contrast with food stores and non-store retailing, which both reached new high levels in June.

The volume of food sales is 5.3 per cent higher than in February whereas non-store retailing is a stunning 53.6 per cent higher.

The proportion of online spending reduced to 31.8 in June when compared with the record 33.3 per cent reported in May but is still considerably higher than the 20 per cent reported in February.

In the three months to June, retail sales were 9.5 per cent lower as a whole when compared with the previous three months.

ONS deputy national statistician Jonathan Athow said: “Retail continued to recover from the sharp falls seen in April, with overall sales now almost back to pre-pandemic levels. But there are some dramatic differences in sales across the retail industry.

“Food sales continue above their pre-pandemic levels due to the closure of cafes, restaurants and pubs. Online sales have risen to record levels, and now count for £3 in every £10 spent.

“On the other hand, clothing sales remain depressed and across the high street sales in non-food stores are down by around one-third on pre-pandemic levels.

“The latest three months as a whole still saw the weakest quarterly growth on record.”

Howard Archer, chief economic advisor to the EY ITEM Club, added: “The retail sector should benefit from a further significant easing of lockdown restrictions in July with pubs, restaurants, hotels and hairdressers allowed to open conditionally in England.

“The social distancing rule was also relaxed from two metres to “one metre plus”.

“However, there is uncertainty as to just how willing consumers will be to spend over the coming months.

“Indeed, persistent consumer caution is seen as a significant risk that could limit the UK recovery.”