Harvir Dhillon
@harvirdhillon
Lead Economist at the British Retail Consortium 🛍️ UK macro, retail and #costofliving 📈👨🏽💻🇬🇧 Opinions my own etc Formerly Experian Leicestershire, United Kingdom 🦊
Here's the sales rankings chart. Electrical household appliances clearly up there, but so are computer and telecoms, as well as second-hand goods. Potentially customers getting ahead of consumer electricals price increases due to component shortages?
No surprise really that a lot of those purchases of fans as well as AC units took place online. And it's why we see non-store retailing soaring 13.5% year-on-year. And it's also why the share of online sales rose to its highest since April 2021, at 29.4%.
But it's again non-food where the resilience is showing up. Food volumes remain depressed (surprisingly very little commentary on this in the ONS publication) but did increase ever so slightly. The hot weather is likely to have brought friends and families together for bbqs.
British shoppers are proving to be remarkably resilient. Retail sales are now 4.2% higher than a year ago. The heatwave forced a lot of purchases, and discretionary spending isn't so discretionary when it comes to feeling cooler.
Looking at the specific food products that dropped the most on the month, they were chocolate, dairy products and there was even some reprieve when it came to the price of beef.
Breaking it down by retail category of good, two categories are below the 2% mark, and the others are in slight deflation. Both clothing and footwear as well as food saw notable price drops on the month.
Notable reduction in the CPI, led by declines in prices at the pump, as well as a fall in food prices on the month, as supermarkets cut prices. Worth saying that the Ofgem price cap was lifted this month, to be reflected in August's figures. Will see inflation head a bit higher, above 3% likely.
A chart that says a lot about the plight of young people seeking work:
💻 Non-food grew just 1.2%, and the channel split was stark. Online rose 5.1%, lifting penetration to a year-to-date high of 39%, buoyed by aggressive promotions. In-store non-food fell 1.1% as shoppers dodged the heat, so little of the gain reached the high street.
🍖 Food rose 2.8%, easing from May as food inflation softened a touch. The World Cup drove more frequent top-up shops and social gatherings, though as ever most growth is value not volume, with households still favouring essentials over indulgence.
📉 The sun stayed out. The shoppers didn't The latest @britishretail.bsky.social - @kpmguk.bsky.social Retail Sales Monitor shows total sales up 1.9% year-on- in June, a clear slowing from May's 3.7% as record temperatures kept shoppers indoors.
🏷️ Non-food crept further up, with annual inflation at 0.6%, a second month in positive territory after years of falling prices. Clothing & footwear stays the lone category in deflation (-3.8%), but electricals (0.6%), books & stationery (3.0%) and furniture (1.7%) are all showing firmer growth.
On a monthly basis, price pressure is creeping up, but we’re yet to see much by way of pass-through into retail food goods, following the commodity price shock earlier in the year.
🛍️ Shop prices hold firm in June The latest @britishretail.bsky.social - NIQ Shop Price Monitor shows headline inflation unchanged at 1.2%, slightly above the 3-month average of 1.1%. Prices rose for a second straight month, but a competitive market is keeping a lid on things. 📊
The online sales figures are likely to get revised, but with an online share of sales at 28.8%, that's the joint-highest since the pandemic peaks. Heat prompts shoppers to buy, and they do a lot of that impulse shopping online.
☀️ And you can see the sorts of categories that did well in the below rankings chart. There were strong sales across clothing, footwear, household goods, and electrical household appliances. Shoppers stocked up and kept the heat at bay, buying lighter clothing, bedding and fans.
At a high-level, it's households good stores as well as department stores (non-specialised stores) that did particularly well. However, Pure play retail sales (non-store) soared, with online orders of heatwaves essentials spiking.
There was a rise in sales across mainly non-food, and food sales did step back (although were higher than a year ago). Non-food benefitted from the warmer weather, driving a lot of purchasing decisions.
Good set of UK retail sales figures, chiming with the BRC's that were published earlier this month. Divergence between values and volumes, however, is widening.
Beverages also dropped on the month... notable decreases in wine, lager as well as coffee. Big increase in tea though 🧐
So which items of food caused the drop in prices? Fish, pasta, jams/honey as well as crisps all had notable drops on the month.
But for now, most retail categories appear to have trended firmly downwards. Clothing as well as heavy goods are flirting with deflation.
Bit of an uptick in services but nothing major. When it comes to goods inflation, it is likely to pick up over the coming quarters, if we read the signal from the PPIs.
💻 The split was stark. Non-food online rose 10.6%, lifting penetration to a year-to-date high of 38%, though that flatters against a weak May 2025 base. In-store non-food fell 0.4% as shoppers stayed in to dodge the heat, so little of the gain reached the high street.
Non-food grew 3.5%. Clothing and footwear returned to growth for the first time since the January sales. Tellingly, large own-label fan stocks cleared in barely a week, suggesting buying was reactive and value-led rather than a sign of returning confidence.
Food rose 3.3%. As ever, some of this is value rather than volume, with food inflation still doing some of the lifting. Bank holiday barbecues helped, though households remain selective, prioritising essentials over discretionary spend. 🍖
Updated retail sales growth rankings. Textiles top, audio, video and music at the bottom.
Meat and fish are still seeing price pressures, although beef has started to ease off a little (still seeing fairly high inflation here, however). On the flipside, dairy products have come down in price over the past number of months (chocolate too).
But for now, food inflation continues to ease, dropping to 3%, the lowest in over a year. Furniture and household goods did fall on the month, but rose in annual terms, as did clothing & footwear.
Services inflation has eased dramatically but over the coming months we'll see greater goods inflation. Whether the feared "second-round" effects are strong will determine the extent to which services is forced back up.