Cold weather chills consumer spending in June

UK Total retail sales decreased by 0.2% year on year in June, against an increase of 4.9% in June 2023, as cold weather negatively affected spending particularly on “weather sensitive categories”. The latest figures from BRC’s and KPMG’s retail sales monitor revealed that food sales increased 1.1% year-on-year over the three months to June, against an increase of 9.8% in June 2023. This is below the 12-month average growth of 5.5%. Non-food sales however decreased 2.9% year on year over the three-months to June, against growth of 0.3% in June 2023. This is steeper than the 12-month average decline of 1.9%. Meanwhile, In-store Non-Food sales over the three months to June decreased 3.7% year on year, against an improvement of 2.0% in June 2023. Online Non-Food sales also decreased by 0.7% year on year in June, against an average decline of 1.0% in June 2023. It comes as the online penetration rate - the proportion of Non-Food items bought online - increased to 36.2% in June from 35.2% in June 2023. Helen Dickinson OBE, chief executive of the BRC, said: “Retail sales performed poorly in June as the cooler weather during the first half of the month dulled consumer spending. Sales of weather-sensitive categories such as clothing and footwear, as well as DIY and gardening were hit particularly hard, especially compared to the surge in spending during last June’s heatwave. “Electronics sales had a better month as football fans cheering on their national teams upgraded their home entertainment systems and people replaced their pandemic purchases. Retailers remain hopeful that as the summer social season gets into full swing and the weather improves, sales will follow suit.” She added: “The retail industry is vital to the nation’s economy as an important source of employment and investment. The industry shapes local communities and provides three million jobs across the country. Through its scale and reach, retail can make a huge contribution to Labour’s policy goals, and the industry stands ready to work with the new Government to find ways to make this happen.” Linda Ellett, UK head of Consumer, Retail and Leisure, KPMG, said: “Summer may finally have arrived, but it did little to persuade consumers to hit the shops, with retail sales flatlining at 0.2% in June. Items for the home topped the best-selling categories, with homewares, cooking accessories and furniture all seeing positive growth in June as consumers made the most of the sunshine to enjoy time at home. “...Despite pressure on household finances easing, with petrol and energy costs and shop price inflation all continuing to fall, consumers remain incredibly reluctant to take the brakes off of their spending. The stimulus of good weather, Wimbledon and Euro 24, which was hoped would drive consumer spending, has so far failed to materialise and financial concerns remain with many households.” She concluded: “Retailers, who are running to stand still at the moment, having exhausted all of the levers they have at their disposal to cut costs and drive sales via promotions, will be looking to the new Government to boost the economy and confidence. The overall economic conditions may slowly be improving, but the health of the sector remains fragile, and action is needed now to help support this vital economic contributor – particularly around neglected areas such as business rate reform.”