UK retail sales rebounded strongly in July, exceeding expectations, thanks to store promotions and robust online sales.
Retail sales rose 0.7 percent month-on-month in July, in contrast to a 0.5 percent fall in June, data from the Office for National Statistics showed Thursday. Sales were forecast to increase by 0.2 percent.
On a yearly basis, overall retail sales volume growth accelerated to 3.5 percent in July from 2.9 percent a month ago. Economists had expected sales to grow at a stable rate of 2.9 percent.
“Many consumers stayed away from some high street stores in July, but online sales were very strong, supported by several retailers launching promotions,” ONS Senior Statistician Rhian Murphy said.
“Food sales remained robust as people continued to enjoy the World Cup and the sunshine.”
Excluding auto fuel, retail sales volume climbed 0.9 percent over the month, while they were forecast to remain flat.
Sales, excluding auto fuel, also grew 3.7 percent annually in July versus the expected increase of 2.8 percent.
Online sales as a total of all retailing continued to increase at 18.2 percent, which was a new record high proportion of total retailing, the ONS said.
Department stores continued to show strong online sales on the year, with an increase of 35 percent, resulting in a new record proportion of online retailing at 18.2 percent, the agency added.
“The big wildcard for retail is the threat of a “no deal” Brexit,” ING Bank economist James Smith said.
“If talks remain in deadlock as March 2019 draws nearer, a few dramatic headlines warning of shortages and other potential risks could feasibly see consumers take a more cautious stance – particularly if people perceive their jobs to be at greater risk,” the economist added.