UK retail sales unexpectedly declined in July

According to the report from the Office for National Statistics, retail sales volumes fell by 2.5% between June and July 2021. Economists had expected a 0.4% increase. Looking more broadly, however, they were up by 5.2% in the three months to July compared with the previous three months and are 5.8% higher than their pre-coronavirus (COVID-19) pandemic February 2020 levels.

Food store sales volumes fell by 1.5% in July 2021, following an increase in the previous month when sales were positively boosted by the start of the Euro 2020 football championship.

Non-food stores reported a fall of 4.4% in sales volumes in July 2021 when compared with June 2021, driven by falls in other stores (negative 10.1%), such as second-hand goods stores and computer and telecoms equipment stores. 

Automotive fuel sales volumes fell by 2.9% over the month, its first monthly fall since February 2021; with heavy rainfall in early July impacting road traffic volumes, automotive fuel sales volumes are now 6.7% below their pre-coronavirus pandemic February 2020 levels.

The proportion of retail sales online increased to 27.9% in July from 27.1% in June and remains substantially higher than the proportion of online retail spending in February 2020 (pre-coronavirus pandemic) of 19.8%.