After temperatures hit record highs last month, summer sunshine heats up retail sales

A sunshine-fuelled surge in retail sales yesterday brought a ray of economic relief as UK consumers braved the cost of living crisis.

Official figures showed that June sales volumes rose a better-than-expected 0.7 percent as temperatures hit record highs for the month.

The warm weather boosted sales of barbecue products and analysts said demand for outdoor furniture was likely to have increased.

It adds to the hope that emerged this week as inflation fell more than expected. That fueled optimism that the worst of Britain’s long-term cost-of-living pressures may be over and interest rates may not have to be raised as often as feared. The 0.7 percent increase in retail sales was much better than the 0.2 percent improvement economists had expected.

And it follows a rise of just 0.1 percent in May, when the economy was disrupted by an extra holiday before the coronation.

However, sales in June were 1 percent lower than in the same month last year.

Office for National Statistics chief economist Grant Fitzner said: “Retail sales grew strongly, with food sales recovering from the effects of the extra holiday, helped in part by good weather, and department stores and furniture stores also had a strong month.

‘However, these were partly offset by decreases in fuel, garden centers and clothing stores. On an annual basis, growth still fell, but at the lowest rate since the start of the war in Ukraine.’

Turnover in food stores rose by 0.7 percent in June, a recovery after a fall of 0.4 percent in May.

But while sales at department stores increased, clothing and shoe stores saw sales decline.

Stores selling household goods rose 1.4 percent, thanks to strong sales in furniture stores.

Despite the cheers, there are still indications that consumers are being pressured. A separate survey by market research agency GfK yesterday showed that consumer confidence fell sharply this month for the first time in six months.

The report said, “Reality is starting to bite as people continue to struggle to make ends meet.”

Jacqui Baker, head of retail at RSM UK consultants, said: ‘With another rate hike by the Bank of England in June, rising mortgage costs and rents continue to cast a dark cloud over consumers, leaving retail spending in a tricky situation.

The increase in turnover will be a welcome boost for retailers.

“Unfortunately, last month’s positivity may be short-lived, as bad weather, rail strikes and lower consumer confidence could put a damper on July’s results.” And Jonathan Moyes, head of investment research at the Wealth Club, said: “While the picture may look rosy now, as the months get colder, there is a risk that the chill of higher mortgage costs and inflation will weigh heavily on household budgets.

‘The big question is: how long will the consumer last? Is this the last summer issue before the cost of living really starts to bite, or is the consumer in a stronger financial position than many predict?’

He added: “For now, the British consumer will continue to defy the doomsayers.”