Key facts
- UK total retail sales rose 1.3% in July, a slowdown from June.
- Food sales increased 3.8%, while non-food sales decreased 0.7%.
- Clothing sales were boosted by a heatwave.
- Broader consumer spending, measured by Barclays, rose 2.0%.
- Pub transactions saw a 10% increase, aided by the World Cup.
- Consumer confidence reached its highest level in 21 months.
British consumers increased their spending on food and in pubs during July, driven by England's performance in the World Cup and a heatwave that boosted clothing sales. However, overall retail sales growth slowed to 1.3%, a below-average increase compared to previous periods, indicating continued consumer caution regarding larger expenditures.
The British Retail Consortium reported that while food sales were up 3.8%, non-food sales saw a decline of 0.7%. Clothing sales benefited from the warm weather, though footwear sales decreased. Pressures are mounting in the food supply chain due to the conflict in the Middle East and prolonged hot weather, which could lead to higher food costs and strain household budgets in the autumn, according to Sarah Bradbury, chief executive of the Institute of Grocery Distribution.
Barclays' measure of broader consumer spending showed a 2.0% rise, slightly exceeding June's increase. Essential spending grew by 2.9%, while non-essential spending saw a 1.6% increase. Pubs reported a significant 10% rise in transactions, attributed to the World Cup. Spending on travel was skewed towards domestic 'staycations,' with airline spending down 6%.
Despite the mixed retail picture, Barclays' consumer confidence measure indicated the most optimism about the UK economy in 21 months. The BRC survey covered July 5-August 1, while Barclays' spending data spanned June 20-July 23.