Retail sales, Great Britain: June 2018

• In the three months to June 2018, the quantity bought in retail sales increased by 2.1%; the largest increase since February 2015, with growth across all main sectors.

• Food stores saw the strongest three-month on three-month growth since May 2001 at 2.2%, with feedback from supermarkets suggesting that the continued good weather and World Cup celebrations had encouraged food and drink sales.

• While hot weather and World Cup celebrations increased food store sales, it was suggested by retailers that these factors resulted in a decrease in footfall in non-food stores; which, along with non-store retailing, resulted in a monthly decline of 0.5% in the quantity bought.

• The decline of 0.5% in June 2018, when compared with the previous month, also followed two months of strong growth in April and May 2018.

• Online sales as a total of all retailing remained unchanged at 18.0%; online spending in clothing and footwear stores continued to achieve new record proportions of online retailing, for the fourth consecutive month, at 17.5%.

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

“Retail sales grew strongly across the three months to June 2018 as the warm weather encouraged shoppers to buy food and drink for their BBQs.

“However, in June retail sales actually fell back slightly, with continued growth in food sales offset by declining spending in many other shops as consumers stayed away from stores and instead enjoyed the World Cup and the heatwave.”

This bulletin presents estimates of the quantity bought (volume) and amount spent (value) in the retail industry for the period 27 May 2018 to 30 June 2018.

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

June’s release has been rebased to 2016 equals 100 in line with Blue Book 2018.

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 inflation). Unless otherwise stated, all estimates included in this release are based on seasonally adjusted data.

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 June 2018, both the amount spent (value) and quantity bought (volume) showed growth across all measures, except the most recent month on the previous month (Table 1).

Strong growth is seen when compared with a year earlier, at 5.3% for the amount spent and 2.9% for the quantity bought. The three-month on three-month growth rate increased by 2.4% for the amount spent and 2.1% for the quantity bought.

Showing a different picture, the month-on-month growth rate declined for both the amount spent and quantity bought at negative 0.3% and negative 0.5% respectively.

The contrasting monthly picture can be explained with the longer-term trend as June 2018 is compared with the strong growth seen in April and May 2018 (Figure 1).

Figure 1 shows the rolling three-monthly index against the more volatile monthly index for the quantity bought in total retail sales.

The beginning of the series showed steady growth in the quantity of goods bought as we see a general increase up to January 2017, as shown by the three-month on three-month movement. Following a short period of decline between January and March 2017, the quantity bought recovered at a slower pace with slight growth up to April 2018.

From April 2018, stronger growth is seen in the rolling three-month movement due to strong monthly increases in April and May 2018. While the monthly path shows a decline in June 2018, this follows the strength seen in the previous two months, which has resulted in a strong increase in the three months to June 2018 at 2.1%; the largest increase since February 2015. Retailers suggested that the hot start to the summer had increased sales.

In June 2018, both the amount spent and quantity bought showed a negative contribution to growth at 0.3 and 0.5 percentage points respectively.

Petrol stations were the only positive contributor to the amount spent in retail sales at 0.3 percentage points, whilst the quantity bought remained flat. Food stores also remained flat when compared with the previous month.

Non-food stores provided the largest downwards contribution on the month for both the amount spent and quantity bought. Feedback from retailers suggest that footfall in these sectors was affected by the warm weather and the World Cup celebrations.

All four main sectors contributed positively to the growth seen in both the amount spent and quantity bought when compared with the same month a year earlier.

The main contributions to growth came from food stores for both the amount spent and quantity bought, at 2.2 and 1.4 percentage points respectively. This contribution to growth was the result of strong year-on-year growth in combination with the amount of money spent in food stores, as seen by the weight to the total Retail Sales Index (RSI) (Table 2).

Petrol sales showed an increase of 1.4 percentage points for the amount spent, but with a slight increase of 0.2 percentage points in the quantity bought. Much of this increase was due to rising petrol prices, which experienced the largest rise since March 2017 at 11.2%. Feedback from retailers suggested that, despite rising prices, more people were filling their tanks for trips away to make the most of good weather.

As seen in Figure 3, food stores provided the largest contribution to growth when compared with the same month a year earlier, with 39 pence of every British pound spent in food stores (Table 2).

Despite the strong year-on-year growth of 25.3% in the quantity bought and 27.6% in the amount spent in specialist food stores, supermarkets provided the largest contribution in the food store sector. This was due to its larger weight to the total Retail Sales Index (RSI), with 36.2 pence in every British pound spent in supermarkets.

While alcohol, drink and tobacco stores show a decline, feedback from supermarkets suggested that food and drink sales in their stores did well with the good weather.

One reason for the strong year-on-year growth in specialist food stores was due to a recovery from the decline seen in the previous year (Figure 4).

When comparing June 2018 with June 2017 for the quantity bought within the separate food sectors, alcohol and tobacco retailers were the only sector to show a continued decrease in year-on-year growth of negative 3.9%.

Supermarkets continued to grow on the year at 3.0%, while specialist food stores (including butchers and bakers) increased by 25.3% following a decline of negative 17.8% in June 2017.

While part of the growth was due to the recovery from a negative June 2017, retailers within specialist food stores also commented that the warm weather had contributed to the growth in June 2018. The Met Office reported that June 2018 was the third driest since 1910, in comparison with a year earlier, which was the eighth wettest since 1910. In addition, food store prices saw a slight slowdown in June 2018, while the quantity bought saw a sharp increase in recent months (Figure 5).

During late 2015, the quantity bought and the amount spent were fairly consistent, as prices began to decline the series converge and remain relatively flat throughout 2016. However, as prices began to climb in early 2017, the two measures began to diverge with the amount spent in food stores increasing in line with the rising prices and the quantity bought remaining broadly flat.

In recent months, both the quantity bought and the amount spent increased at a faster rate. While this coincided with a slowdown in price growth, feedback from retailers also suggested that the warm weather and World Cup celebrations boosted food and drink sales further.

The strong increase of 2.2% in the quantity of food bought in the three months to June 2018 resulted in the highest growth witnessed for the underlying trend since May 2001, which was at 4.2%.

The three-month on three-month estimate for amount spent also saw strong growth in June 2018 at 2.5%; the highest growth since an increase of 2.6% in April 2009.

Internet sales increased by 14.3% for the amount spent in June 2018 when compared with June 2017, with all sectors showing strong year-on-year growth (Table 3).

The month-on-month growth rate fell by 0.4%, showing a mixed picture across sectors as food, department stores, clothing and non-store retailing declined on the month. However, these declines follow strong growth in the previous month.

Online sales as a total of all retailing remained unchanged at 18.0%. Online spending in clothing and footwear stores continued to achieve new record proportions of online retailing, for the fourth consecutive month, at 17.5%.

The only international estimate of retail sales available for May 2018 was published by the US Census Bureau on 14 June 2018. In its advanced monthly sales for retail and food services, May 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, 456KB) across the European Union on 3 July 2018 for May 2018. This shows the seasonally adjusted volume of retail trade in both the euro area (EA19) and EU28 when compared with April 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.

We have published an article alongside this release relating to the methodological differences with our main external source for comparison, the British Retail Consortium (BRC).

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