UK retail sales unexpectedly rise in June

(Sharecast News) - UK retail sales unexpectedly rose in June thanks in part to warm weather and discounting, according to figures released on Friday by the Office for National Statistics. Sales were up 1% on the month following a 1.2% jump in May, and versus expectations for a 0.3% decline.

On the year, sales rose 4.2%, ahead of expectations for a 2.3% increase.

The ONS said sales promotions and the warm weather increased sales volumes for non-store and clothing retailers.

The figures showed that the proportion of online sales rose from 28.9% in May to 29.4% in June - the highest proportion since April 2021.

ONS senior statistician Hannah Finselbach: "Internet retailers did especially well, with businesses telling us that this was because of promotions and the warm weather, with strong demand in June for outdoor products, air conditioning and clothing. Sports merchandise also sold well online."

Jonathan Moyes, head of investment research at Wealth Club, said: "Forecasters were predicting a dreary month for retailers as shoppers were expected to take shelter from the heat. Instead, the heat appears to have led to a sales bonanza as shoppers stocked up on air conditioning units, outdoor furniture and sports merchandise as the World Cup got underway.

"Whilst it is pleasing to see our beleaguered retailers get a lift over the month. The reading will do little to improve consumer and business sentiment. The resumption of the Iran war in July has seen Brent Crude touch $100 again overnight. This will undoubtedly weigh on consumers in the latter half of this year as inflation again begins to take its toll. Mortgage rates are already responding to a likely rise in interest rates in response.

"Whilst the sun was shining on retailers in June, there are some dark clouds in the distance that are likely to keep a lid on sentiment for the remainder of the year."