UK retail sales volumes fell by 1.2 per cent last month following a rise in May.

According to the latest ONS retail figures, sales volumes decreased across most sectors, with department stores and clothing retailers broadly returning to levels recorded in the first quarter of the year.

Looking at the quarter, sales volumes fell by 0.1 per cent in Quarter 2 (April to June) 2024, when compared with Quarter 1 2024, and fell by 0.2 per cent, when compared with Quarter 2 2023.

The results come after volumes rose by 2.9 per cent in May, where both clothing and furniture retailers rebounded after poor performance in the previous month.

Erin Brookes, European retail and consumer lead at Alvarez & Marsal, described June as a “washout” for retail sales, adding poor weather is partly behind the drop in sales in a range of sectors including food and clothing.

“This comes despite significant discounting and deflation in fashion retail, with volumes remaining stagnant,” he said.

Matt Jeffers, retail strategy and consulting managing director for Accenture in the UK & Ireland said: “Retailers will be bitterly disappointed to see sales decline in June, particularly as many had hoped the array of cultural and sporting events taking place in the month would provide a welcome boost. Sales across department stores and clothing fared particularly poorly, a concern as we enter the important summer months,”

According to Jeffers, the sector will hope to buck the trend in July, with the Euros and Wimbledon finals likely to drive stronger sales.

“While the Olympics may provide another boost in late summer, retailers should be thinking about how they can reignite sales momentum for the remainder of the year,” he said. “Sharpening their product and value propositions will be crucial as consumers remain persistently discerning about what, where and when they are willing to make a purchase.”

Bogdan Toma, partner at McKinsey & Company, highlighted how June’s sale decline in all sectors reflects a more general stagnation of consumer spending appetite.

“The near 10 per cent drop in sales for the online channel of department stores may also underline the more structural challenges facing the department store sector, with consumers turning to category specialists and scaled online pure players,” explained Toma. “Holidays and the last of Summer’s big sporting events could be a double-edged sword for retail demand.

“Ultimately competitiveness around core proposition, including pricing and promotion, but also customer experience, assortment and availability, are what British retailers will be busy with this summer.”

Kris Hamer, director of insight at the British Retail Consortium, said it remains hopeful for next months and retailers confidence will improve.

“The King’s speech laid the foundations for a more modern and dynamic British economy, and retailers look forward to working closely with Government to maximise the industry’s contribution. This includes greater investment in skills and training, and using reforms to planning laws to create thriving town and city centres.”

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