- Retail sales fell 0.1% in June and May fall was worse than previously stated
- Food sales jumped 3.1% because of Jubilee celebrations
- Fuel sales fell 4.3% as the price at the pump pushed motorists to cut back
Danni Hewson, AJ Bell financial analyst comments on June retail sales figures:
“The bottom lines is people are buying less. Big ticket items are being put on hold until life becomes more affordable. Day to day spending requirements are being carefully weighed and costed, and when the price tag gets too high there’s no choice but to cut back.
“People did splurge on their street parties, house parties and bank holiday breaks. The nation raided supermarket shelves for party snacks, filled trollies with cases of beer and wine, and in some cases even bought all the bits needed to whip up a Jubilee pudding. It was a moment to lose themselves, to push problems aside and enjoy the festivities with friends and families. But June’s 0.1% fall in retail sales won’t fool anybody - the sector is under siege and the Jubilee celebrations papered over the cracks at best.
“With prices at the pumps hitting record levels motorists had to think carefully about every journey. If it was manageable people were swapping four wheels for two, or pulling on their trainers to avoid using what is beginning to feel like the liquid gold needed to power our motors.
“The rush to refresh wardrobes is over. Clothing sales have plummeted, perhaps partly because shoppers have bought their holiday attire and celebratory outfits, but mostly because prices have been creeping up and retailers know affordability is an issue.
“It’s no co-incidence that designer sofa maker Made.com has issued its third profit warning in the last week. Online retail has taken a big hit and virtual household goods stores have watched sales tumble almost twenty percent in the last year.
“Looking at FTSE 350 retailers since the start of the year only Vivo Energy and Sports Direct owner Frasers have seen share prices rise. The latter delivered a remarkable set of results considering the economic backdrop, demonstrating that bricks and mortar stores can still hold considerable value.
“But a summer of discontent is likely to cause more damage to high streets. Some retailers are already commenting that train strikes have hit sales as people once again fire up their kitchen tables or garden sheds and stay at home to avoid the disruption.
“It’s not a pretty picture and, with inflation expected to heat up further just as that all important golden period begins, the sector will be nervous. Savings are dwindling and simply covering day to day living costs is becoming harder.”
