Quantity of goods bought in June rose 1% from May, says ONS

This article is more than 1 year old

This article is more than 1 year old

Retail sales in the UK were unexpectedly strong in June, boosted by sales of secondhand goods at charity shops and antique dealers, although department stores continued to struggle.

The quantity of goods bought in June rose 1% from May, according to the Office for National Statistics. City economists had forecast a 0.3% drop in sales, following May’s 0.6% fall. The figures boosted the pound by half a cent to $1.2480.

However, there was a sharp slowdown in retail sales growth in the three months to June. Sales rose 0.7%, down from 1.6% in the previous three months – marking the weakest growth rate since the three months to February.

Asos issues third profit warning in seven months as shares fall Read more

Many economists believe the UK economy could shrink in the second quarter, a hangover from the stockpiling boom in the run-up to the original Brexit deadline in March. The Office for Budget Responsibility warned on Thursday a no-deal Brexit would plunge Britain into a recession.

Rhian Murphy, head of retail sales at the ONS, said: “Retail sales growth slowed in the latest three months as food stores saw falling sales for the first time this year and department stores continued their steady decline.

“However, retail as a whole saw a return to growth in the month of June, mainly due to growth in non-food stores, with increased sales in secondhand goods, including charity shops and antiques.”

Clothes sales staged a partial recovery, rising 1.2% following May’s 3.8% drop, as consumers flocked to summer sales in June after a slow uptake in the previous month.

Not all sectors experienced a rebound – department store sales fell 0.2%, the sixth month of declines and the worst run since records began in the late 1980s.

Samuel Tombs, chief UK economist at the consultancy Pantheon Macroeconomics, said: “June’s retail sales figures are a timely reminder that consumers aren’t being haunted by the possibility of a no-deal Brexit but are happy to spend the proceeds from rising growth in the real wages.

Sign up to the daily Business Today email or follow Guardian Business on Twitter at @BusinessDesk

“Consumers will remain deaf to the warnings about a no-deal Brexit and only pare back their spending if it happens.”

He said June’s strong rise was not flagged by any of the surveys, partly because sales in the “other stores” category – mainly consisting of small, independent retailers – jumped by 3.2%.

The British Retail Consortium’s latest survey showed sales fell 1.3% last month, the biggest drop on record.

Paul Dales, chief UK economist at Capital Economics, said: “Decent wage growth of above 3% will probably mean that household real incomes will rise by around 2% this year. That suggests households still have the ability to spend and remain the strongest part of the economy. What happens with Brexit in the coming months may determine whether or not households want to spend.”