Retail sales up in June as Euro 2020 boosts food sales
Retailers saw sales rebound in June as football fans enjoying the Euros bought more food and drink but non-food retail, including clothing, was down.
The Office for National Statistics (ONS) revealed that retail sales volumes increased by 0.5% in June.
The latest data came after a surprise dip in retail sales in the previous month, while the latest figures also surpassed the expectations of analysts who had forecast a flat performance.
The ONS also said June’s figures represented a 9.5% increase in retail sales volumes against pre-pandemic levels from February 2020.
It added that last month’s jump was primarily caused by strong sales at food stores, which rose by 4.2%.
The ONS highlighted anecdotal evidence that linked strong food and drink sales with the start of the Euro 2020 tournament.
This represented a rebound following a 5.5% fall in food store sales in May after the reopening of hospitality had initially cut into trading.
ONS director of economic statistics Darren Morgan said: “June’s retail sales have picked up again following the dip seen last month, with the main driver coming from food and drink sales, boosted by football fans across Britain enjoying the Euros."
However non-food stores suffered a decline of 1.7% in sales volumes for the month, compared to May 2021, which was a result a decrease in sales at furniture and clothing stores.
While the increase looks to be good news on the face of it, the fall in sales for non-food retailers means the Government must to do more to boost demand with New West End Company in London continuing to call for a relaxation of Sunday trading laws (see Expert reaction below).
Expert reaction
Lisa Hooker, consumer markets leader at PwC
“The first full month of reopening for indoor hospitality was always going to be make or break for the retail sector, and we’ve seen both increased footfall for the high street, with online sales at their lowest level (26.7%) since the start of the pandemic, and, perhaps surprisingly, a boom in demand for grocery.
“The combination of both food and drink sales to supporters celebrating the home teams’ successes at the Euros and record high consumer sentiment levels seem to have particularly benefited June’s results.
“However, headline growth masks declines in other non-food categories, with household goods sales suffering their first non-lockdown driven decline since the start of the pandemic, as people started to spend more time out of the home.”
Karen Johnson, Head of Retail & Wholesale at Barclays Corporate Banking
“Last month demonstrated what a huge impact sport can have on the UK’s retail industry. With the Euros in full swing, and build up to both Wimbledon and the Lions Tour underway, sporting triumph was still on the cards for many home nations fans back in June – and they went out and spent accordingly.
“Whilst face paint and bunting may have been the most visible purchases during the Euros, food and drink was the biggest winner as consumers took advantage of good weather and reduced restrictions to join with friends and family in showing their support to their sporting heroes.
“Looking ahead, the reopening of hospitality and leisure may take some of the wind out of retailers’ food and drink sales in the short term – but clients I have spoken to seem optimistic, and are hoping that sales will continue to heat up over the rest of the summer.”
Jace Tyrrell, chief executive at New West End Company, which represents 600 businesses on Oxford Street, Regent Street, Bond Street and in Mayfair
"The slight rise in retail sales provides a splash of hope for retailers everywhere, however we are by no means out of the woods. The end of restrictions has seen footfall in the West End rise by 3% week on week, but it is still a long way off the traffic and spend that is needed to reinvigorate businesses. There are a few reasons to be optimistic with many people choosing London as the prime destination for their summer staycation and people gradually returning to offices, but, while safety is of course top priority, we need much larger volumes of visitors to the district.
“We need the Government to apply the same levels of freedom afforded to the public to our retailers. They must look to relax archaic Sunday Trading laws, giving retailers the flexibility they need to compete with global competitors, whilst also meeting the changing demands of the post-pandemic consumer. There also needs to be fundamental reform of the business rates system, giving businesses much needed respite and an opportunity to thrive following one of the most difficult years on record.
“For viable businesses to stay afloat over the summer months, we need clear guidance from the Government. This will then give consumers the confidence they need to come back to the West End and enjoy a summer of celebration in the Capital.”
