The Office for National Statistics said retail sales fell by 0.1 per cent in June as the boost in the food trade was more than offset by another slump in fuel sales. A consensus of economists had predicted a 0.2 per cent decline in the latest monthly reading.
It came after a heavier than previously thought slump in retail sales in May, with the ONS revising down its original prediction of a 0.5 per cent decline to 0.8 per cent.
Heather Bovill, ONS deputy director for surveys and economic indicators, said: “After taking account of rising prices, retail sales fell slightly in June and although they remain above their pre-pandemic level, the broader trend is one of decline. After a fall in May, food sales picked up due to the jubilee celebrations, but this was the only sector to report an increase.”
Food store sales volumes increased by 3.1 per cent, picking up following a recent downward trend for the sector as more people returned to restaurants and pubs following the easing of pandemic restrictions.
In previous months, retailers had highlighted a decline in volumes because of the increased cost of products and pressure on household bills.
Bovill suggested “concerns around affordability” had more of an impact on demand for clothing and household goods.
Sales at non-food stores dropped by 0.7 per cent for the month, driven by a 4.7 per cent decline in sales volumes at clothing stores, while household goods were down 3.7 per cent.
Fuel sales also saw a particularly sharp drop for the month, falling 4.3 per cent in response to a record jump in petrol prices in June.
Figures from the Scottish Retail Consortium (SRC) earlier this week revealed that total sales north of the Border rose by 4.4 per cent in June, based on overall value, compared with the same month last year.
The SRC welcomed the “sprightlier set of trading figures”, noting that they came during a month bookended at the start by the Jubilee celebrations and at the end by “yet more disruption on the railways” and with shopper footfall continuing to lag.
Jacqui Baker, partner and head of retail at audit, tax and consulting firm RSM UK, said: “While the 3.1 per cent increase in [UK] food sales could be due to the extra bank holiday, it may also be a sign that consumers are eating in more to save money.
“The drop in sales volumes in every other category, except other stores, suggests the ‘Jubilee jump’ that retailers were hoping for failed to deliver.
“The cost-of-living squeeze was further compounded by the rail strikes which took place later on in the month, contributing towards the fall in sales.
“There’s a noticeable shift among consumers’ shopping habits, with good value products becoming an increasingly important factor. Shoppers are concerned about the quality and sustainability of a product, but at the right price.”