UK retail gets boost from online shopping in July

BRITISH shoppers spent more than expected last month as many were enticed by online shopping promotions, despite a weaker picture recently as households battled the highest inflation in more than 40 years, official figures showed on Friday (Aug 19).

Retail sales volumes, adjusted for inflation and the time of year, rose 0.3 per cent on the month in July after a downwardly revised drop of 0.2 per cent in June, the Office for National Statistics (ONS) said.

Sales have fallen by 1.2 per cent over the past 3 months and were 3.4 per cent lower than a year ago.

Economists polled by Reuters had forecast a 0.2 per cent monthly drop in sales volumes and a 3.3 per cent annual fall.

“Online sales did pick up this month, as retailers told us that sales were boosted by a range of offers and promotions. However, fuel sales fell with some evidence suggesting the very hot weather meant fewer people travelling,” ONS statistician Darren Morgan said.

Amazon held its annual Prime Day promotion last month, which in previous years has coincided with an uptick in British retail sales, although the ONS said greater spending was recorded by a range of online retailers, especially for household goods.

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However the longer-term trend for sales was downward, the ONS said, and the Bank of England has warned that high inflation is likely to tip Britain into recession later this year.

Consumer price inflation jumped to an annual rate of 10.1 per cent in July, its highest since 1982, from 9.4 per cent in June, driven by an increase in food prices on top of previous sharp rises in household energy bills.

A GfK consumer survey earlier on Friday showed households were “exasperated” by the surging cost of living, and that their sentiment was the weakest since the series began in 1974.

Supermarkets have previously reported shoppers switching to cheaper products, and frozen food chain Iceland earlier this week said it would give interest-free loans of up to £100 (S$165) to its poorest customers. REUTERS