Retail sales, Great Britain: July 2018

• In July 2018, the quantity bought increased by 0.7% when compared with the previous month, recovering from a decrease of 0.5% in June 2018.

• When compared with the same month a year earlier, the quantity bought in July 2018 increased by 3.5% when compared with the slower growth of 1.1% in July 2017.

• The quantity bought in non-store retailing showed strong growth both on the month and year-on-year at 4.9% and 16.9% respectively.

• Feedback from non-store retailers suggested that online promotions further encouraged sales, while non-food stores reported a reduction in footfall in July 2018.

• Spending online continued to increase to reach a new record proportion of all retailing at 18.2% in July 2018; with strong growth in department stores also reaching a record proportion at 18.2%.

Commenting on today’s retail sales figures, Office for National Statistics senior statistician, Rhian Murphy said:

“Many consumers stayed away from some high street stores in July, but online sales were very strong, supported by several retailers launching promotions. Food sales remained robust as people continued to enjoy the World Cup and the sunshine.”

This bulletin presents estimates of the quantity bought (volume) and amount spent (value) in the retail industry for the four-week period 1 July 2018 to 28 July 2018.

Unless otherwise stated, the estimates in this release are seasonally adjusted.

The Retail Sales Index (RSI) measures the value and volume of retail sales in Great Britain on a monthly basis. Data are collected from businesses in the retail industry and the survey’s results are used to produce seasonally adjusted monthly, quarterly and annual estimates of output in the retail industry at current price and at chained volume measures (removing the effect of price changes).

The RSI is an important economic indicator and one of the earliest short-term measures of economic activity. It is used in the compilation of the national accounts and widely used by private and public sector institutions, particularly by the Bank of England and Her Majesty’s Treasury to assist in informed decision- and policy-making.

Summary information can be found in the RSI Quality and Methodology Information report.

In July 2018, both the amount spent (value) and quantity bought (volume) showed growth across all measures (Table 1). When compared with the previous month, the quantity bought increased by 0.7%, recovering from a decrease of 0.5% in June 2018.

In the three months to July 2018, the quantity bought increased by 2.1%, which includes the strong monthly growth of 1.4% in May 2018.

When compared with a year earlier, the quantity bought in July 2018 increased at a faster rate, at 3.5%. However, looking at growth rates over time demonstrates a fuller picture, as we see the year-on-year growth rates in recent months return to a similar level experienced in mid-2017 (Figure 1).

Looking at the year-on-year growth rates from July 2016 to July 2018, we see a general slowdown to growth up to October 2017, where growth slowed to 0.1% when compared with the peak experienced in the previous October at 7.3%. A general increase to year-on-year growth has followed to reach a similar level experienced in mid-2017.

The increase of 3.5% in July 2018 compares with the slower growth of 1.1% in the previous year and is seen across all main sectors (Figure 2).

In July 2018, all four main sectors contributed positively to the growth in both quantity bought and amount spent when compared with the same month a year earlier, at 3.5 and 5.9 percentage points respectively.

The main contribution to the amount spent came from food stores at 2.2 percentage points, whereas the main contribution to the quantity of goods bought came from non-store retailing at 1.6 percentage points.

Petrol stations was the only negative contributor to the overall growth in amount spent and quantity bought, at negative 0.2 and negative 0.1 percentage points respectively. Petrol prices increased by 11.9% on the year; the largest rise since March 2017.

While the amount spent in food stores showed a positive contribution of 0.4 percentage points, the quantity bought remained flat following a sustained period of growth.

In contrast, many retailers in the non-food stores sector reported a reduction in footfall, despite its positive contribution to growth due to its large weight to total retail.

Non-store retailing provided the largest positive contribution on the month for both the amount spent and quantity bought, at 0.4 and 0.5 percentage points respectively, due to strong growth in this sector (Table 2).

Other non-store retailing accounts for just 0.6% of total retail sales and includes the following:

• retail sale of any kind of product in any way that is not included in previous classes

• by direct sales or door-to-door sales persons

• through vending machines

• direct selling of fuel (such as heating oil, firewood), delivered to the customers premises

• activities of non-store auctions (retail, except internet)

• retail sale by (non-store) commission agents

Table 2 shows strong growth for both month-on-month and year-on-year estimates at 4.9% and 16.9% respectively. Most of this growth came from internet, mail order, stalls and markets as this category contributes the higher weighting to total retail at 9.1 pence in every British pound.

Feedback from retailers suggests that online promotions encouraged sales in July, which can be seen in the fall in prices for non-store retailing in July 2018 (Figure 4).

We have seen a steady increase in both the amount spent and the quantity bought in the non-store retailing sector, alongside relatively stable non-store prices, since January 2016.

The amount spent is equal to the quantity bought multiplied by the price, which has increased steadily as the number of goods bought increased at a faster rate than prices. At an aggregate level, prices in non-store retailing have decreased in July 2018, which coincides with a sharp increase in both the amount spent and quantity bought.

Although the weight of non-store retailing is relatively small at 9.7%, the large increases to growth in this sector in July 2018 account for it being one of the largest contributors to the overall growth for both the month-on-month and year-on-year estimates in total retail sales.

Focusing on online only sales, the non-store retailing sector accounts for just over half of all online retailing at 51.2% (Table 3).

Table 3 shows month-on-month and year-on-year growth rates for online retailing, by sector, in addition to the proportion of online sales to all retail sales. The percentage weights indicate where money is spent online.

Internet sales increased by 15.3% for the amount spent in July 2018 when compared with July 2017, with all sectors showing strong year-on-year growth.

Department stores continued to show strong online sales on the year, with an increase of 35.0%, resulting in a new record proportion of online retailing at 18.2%.

The month-on-month picture was also one of growth as household goods and other non-food stores were the only sector to decrease when compared with June 2018.

Online sales as a total of all retailing continued to increase at 18.2%, reaching a new record high proportion of total retailing.

The only international estimate of retail sales available for June 2018 was published by the US Census Bureau on 16 July 2018. In its advanced monthly sales for retail and food services, June 2018 (PDF, 750KB) they include the amount spent in the US retail industry, including motor vehicles and parts and food services.

Eurostat also published their latest estimates of the Volume of retail trade (PDF, 506.2KB) across the European Union on 3 August 2018 for June 2018. This shows the seasonally adjusted volume of retail trade in both the euro area (EA19) and EU28 when compared with May 2018.

Data for Northern Ireland are published by the Northern Ireland Statistics and Research Agency (NISRA).

It should be noted that accurate comparisons cannot be made against these or other international statistics due to a variety of reasons, including differences in methodology.

Our Monthly Business Survey (MBS) for retail sales measures output from the retail industry in Great Britain. It samples 5,000 businesses, with all businesses employing over 100 people or with an annual turnover of more than £60 million receiving an online questionnaire every month.

Further qualitative data or information and summary tables can be found in the attached datasets. This includes data on:

• response rates

• standard errors

• revision triangle

• distribution analysis

The Retail sales Quality and Methodology Information report contains important information on:

• the strengths and limitations of the data and how it compares with related data

• uses and users of the data

• how the output was created

• the quality of the output including the accuracy of the data

The results of the seasonal adjustment review will be incorporated into the estimates for September 2018 to be published on 18 October 2018. This is to allow for further quality assurance to be undertaken.

We have significantly improved our sample for the commodity breakdown (Table 5 and Retail Sales Index (RSI) pounds data), increasing the number of contributors from 31 to 54. This has provided increased coverage and does not impact the main retail sales data.