Retail sales, Great Britain: June 2015

• Year-on-year estimates of the quantity bought in the retail industry continued to show growth for the 27th consecutive month in June 2015, increasing by 4.0% compared with June 2014. This was the longest period of sustained year-on-year growth since May 2008, when there were 31 periods of growth

• The underlying pattern in the data, as suggested by the 3 month on 3 month movement in the quantity bought, continued to show growth for the 28th consecutive month, increasing by 0.7%. This is the longest period of sustained growth since consistent records began in June 1996

• Compared with May 2015, the quantity bought in the retail industry was estimated to have decreased by 0.2%. Falls were reported by predominantly food stores, other stores, household goods stores and petrol stations

• Average store prices (including petrol stations) fell by 2.9% in June 2015 compared with June 2014. This is the 12th consecutive month of year-on-year price falls with all store types reporting decreases. The largest contribution came once again from petrol stations which fell by 10.0%, the 22nd consecutive month of year-on-year falling prices in this store type

• In June 2015, the amount spent in the retail industry increased by 0.9% compared with June 2014, but decreased by 0.1% compared with May 2015. Non-seasonally adjusted data show that the average weekly spend in the retail industry was £7.1 billion, unchanged from the previous month and the June 2014 figure

• The value of sales made online in June 2015 increased by 1.4% compared with May 2015 and accounted for 12.4% of all retail sales. Online sales increased by 11.4% compared with June 2014

• The value of sales made online in June 2015 increased by 1.4% compared with May 2015 and accounted for 12.4% of all retail sales. Online sales increased by 11.4% compared with June 2014

• Revisions in this release were caused by the incorporation of late data. The earliest revisions point for current price, non-seasonally adjusted data was June 2014. More information on revisions can be found in the background notes

This bulletin presents estimates of the quantity bought (volume) and amount spent (value) in the retail industry for the period 31 May 2015 to 4 July 2015. Unless otherwise stated, the estimates in this release are seasonally adjusted.

Users are reminded that the figures contained in this release are estimates based on a monthly survey of 5,000 retailers, including all large retailers employing 100 people or more and those with annual turnover of greater than £60 million who employ 10 to 99 people.

Retail sales estimates are produced from the monthly business survey – RSI. The timeliness of these retail sales estimates, which are published just 3 weeks after the end of each month, makes them an important early economic indicator. The industry as a whole is used as an indicator of how the wider economy is performing and the strength of consumer spending. Results are revised for the previous 13 published periods. More information about the data content for this release can be found in the background notes.

Revisions are an inevitable consequence of the trade-off between timeliness and accuracy. The response rate in June 2015 was 60.1% of questionnaires, accounting for 92.5% of registered turnover in the retail industry. Therefore the estimate is subject to revisions as more data become available.

All estimates, by definition, are subject to statistical uncertainty and for the retail sales index we publish the standard error associated with the non-seasonally adjusted estimates of year-on-year and month-on-month growth in the quantity bought as a measure of accuracy. More information on these standard errors can be found in the background notes of this bulletin and in the quality tables of this release.

It should be noted that we are continually working on methodological changes to improve the accuracy of the retail sales estimates; progress on these can be found on the ONS continuous improvement page on our website.

For different ways to access the data see the reference tables section on our website. These include:

• non-seasonally adjusted and seasonally adjusted volume and value indexes by industry

• year-on-year and month-on-month growth rates by industry

At a glance

In June 2015, the quantity bought in the retail industry (volume) increased by 4.0% compared with June 2014. The amount spent (value) increased by 0.9%. In June 2015, non-seasonally adjusted data show that the prices of goods sold in the retail industry (as measured by the implied price deflator) decreased by 2.9%. More information on how the implied price deflator is calculated can be found in section 3 of the background notes.

Amount spent in the retail industry

In the 5 week reporting period during June 2015, the amount spent in the retail industry was £35.6 billion (non-seasonally adjusted). This compares with £28.3 billion in the 4 week reporting period for May 2015 and £35.3 billion in the 5 week reporting period for June 2014.

This equates to an average weekly spend of £7.1 billion in June 2015, unchanged from the previous month and the June 2014 figure.

Three distinct periods emerge from Figure 1. Between June 2006 and July 2008 retail sales volumes were experiencing continuous growth with the volume of sales increasing by 2.4% over the period. Growth in inflation (Consumer Prices Index) was consistently lower than average weekly earnings over most of this period, meaning real earnings grew, which possibly increased the purchasing power of consumers.

However, between August 2008 and May 2013, the volume of retail sales fluctuated between periods of contraction and expansion, and as a result broadly the same volume of sales were recorded toward the beginning and end of the period. This weakness may be partly explained by the economic climate over this period. Growth in average weekly earnings had been lower than inflation over most of the period, which implies that earnings fell in real terms. However, the value of retail sales continued to grow, increasing by 12.8% over the period, reflecting rising prices between these dates.

The third period shown in Figure 1 started in June 2013, when growth in volume terms began to increase notably, despite average weekly earnings growing at a slower rate than CPI until September 2014. The volume of retail sales in June 2015 was 7.7% higher than it was in June 2013.

In 2013 prices in retail outlets began to fall and this accelerated throughout 2014 and coincided with increased growth in retail sales over this period. In addition, this upturn in spending has been accompanied by a decline in the savings ratio, from an average of 8.5% over the period 2008 to 2012, to an average of 6.1% in 2014.

The retail industry is divided into 4 retail sectors:

• predominantly food stores (for example, supermarkets, specialist food stores and sales of alcoholic drinks and tobacco)
• predominantly non-food stores (for example, non-specialised stores, such as department stores, textiles, clothing and footwear, household goods and other stores)
• non-store retailing (for example, mail order, catalogues and market stalls)
• stores selling automotive fuel (petrol stations)

In June 2015, for every pound spent in the retail industry:

• 41 pence was spent in food stores
• 42 pence in non-food stores
• 7 pence in non-store retailing
• 10 pence in stores selling automotive fuel

Using these as weights, along with the year-on-year growth rates, we can calculate how each sector contributed to the total year-on-year growth in the quantity bought.

Figures 2 and 3 show the contribution of each sector to the quantity bought (volume) and amount spent (value) in the retail industry between June 2015 and June 2014.

In June 2015, all 4 main retail sectors saw an increase in the quantity bought (volume). The largest contribution came from the non-food stores sector.

In June 2015, 2 out of the 4 main sectors (non-store retailing and non-food stores) contributed to the increase in amount spent (value). The largest contribution came from the non-food stores sector.

Main points:

• in June 2015, all store types except other stores showed increases in the quantity bought compared with June 2014
• all store types except other stores and petrol stations showed increases in the amount spent year-on-year
• in June 2015, all store types saw falls in average store price compared with June 2014

More information on how average store prices are calculated can be found in the quick guide to retail sales or in the background notes.

In textile, clothing and footwear stores in June 2015 compared with June 2014:

• the quantity bought increased by 6.2%

• the amount spent increased by 4.7%

• average store price decreased by 1.2%

Compared with May 2015:

• the quantity bought increased by 0.8%

• the amount spent increased by 1.1%

• average store price decreased by 0.4%

Figure 4 shows the longer-term picture for the quantity bought and amount spent in textile, clothing and footwear stores. It shows that the performance of this sector is volatile, however, since late 2012 to early 2013, the underlying trend is one of growth after a stagnant period that followed the economic downturn, when disposable income was limited.

It is worth considering some of the factors that could be the cause of some of the volatility seen in the monthly series, for example:

• unseasonal weather

• store price

• in-store sales

Focusing first on unseasonal weather, we saw the effect of this in September 2014 when unseasonably warm weather meant that consumers delayed purchases of autumn and winter clothing and lead to a fall in both the amount spent and quantity bought. In April 2015 we saw the effect of warmer than average weather which resulted in an increase in the amount spent and quantity bought.

Unseasonably wet or cold weather will also impact on sales as we saw in March 2013 when the second coldest March on record resulted in a fall in the amount spent and quantity bought.

Looking at store pricing and in-store sales together, Figure 5 shows average store prices and clearly expresses a seasonal pattern that coincides with traditional in-store sales periods.

Generally, prices will fall slightly in December as sales start in preparation for Christmas followed by a larger fall in January as the post-Christmas sales period reaches its peak. The second fall of the year comes in June and July when the summer sales period starts. These sales periods will impact on the quantity bought and amount spent within the sector.

It is also worth noting that high cotton prices in 2010 to 2012 caused average store prices to increase steadily during this period and coupled with low levels of disposable income resulted in the stagnation of the amount spent and quantity bought by consumers.

In June 2014, we did not see falling prices as sales were delayed due to warmer weather, and this may have distorted the year-on-year growth in June 2015 in both amount spent and quantity bought. However, it is also clear from Figure 5 that the prices in store have not increased in January 2015 to June 2015 as much as they have in previous years.

Seasonally adjusted internet sales data are provided within this release. These seasonally adjusted estimates are published in the RSI internet tables and include:

• a seasonally adjusted value index
• year-on-year and month-on-month growth rates

Internet sales are estimates of how much was spent online through retailers across all store types in Great Britain. The reference year is 2011=100.

Main points:

• average weekly spending online in June 2015 was £815.4 million; this was an increase of 11.4% compared with June 2014
• the amount spent online accounted for 12.4% of all retail spending, excluding automotive fuel, compared with 11.3% in June 2014
• the decrease of 14.7% in other stores was the lowest year-on-year fall since March 2012, when it fell by 16.9%
• Table 3 shows the year-on-year growth rates for total internet sales by sector and the proportion of sales made online in each retail sector.

Table 4 illustrates the mix of experiences among different-sized retailers. It shows the distribution of reported change in sales values of businesses in the RSI sample, ranked by size of business (based on number of employees). It shows that businesses with 40 to 99 employees saw the largest growth in the amount spent, comparing June 2015 with June 2014. Businesses with 100 and over employees experienced growth of 1.4%.

The only international estimate of retail sales available for June 2015 was published by the US Census Bureau on 14 July 2015. In its advanced retail sales estimates for June 2015, the amount spent in the US retail industry, including motor vehicles and parts and food services, decreased by 0.3% from the previous month and increased by 1.4% compared with June 2014. Total sales for the 3 months to June 2015 were up 1.7% from the same period a year ago.

The latest estimates from Eurostat for May 2015 of the volume of retail trade across the European Union increased by 0.2% in the euro area (EA19) and by 0.3% in the EU28 when compared with April 2015. Compared with May 2014, the retail sales index increased by 2.4% in the EA19 and by 3.0% in the EU28. It should be noted that an accurate comparison cannot be made as Eurostat data are calculated on a 2010 = 100 basis, while GB data are now calculated on a 2011 = 100 basis.