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In a boost for the retail sector, a combination of sunny weather and the women’s Euro football tournament contributed to an increase in sales during July, according to the Office for National Statistics (ONS). Retail sales volumes saw a rise of 0.6% in July, surpassing analysts’ expectations. Online retailers and clothing and footwear stores experienced particularly strong sales growth during the month.
The release of the figures was delayed by two weeks due to concerns about the data’s accuracy, with the ONS admitting errors in how the survey data aligned with calendar months. The reliability of ONS statistics has been called into question recently, especially regarding job market figures, as these statistics play a crucial role in shaping government policies and influencing financial decisions by institutions like the Bank of England.
Despite the increase in sales volumes for July, the ONS reported that sales for the three months leading up to July were down by 0.6% compared to the previous three months. While sectors like supermarkets and household goods stores experienced a drop in spending since March, online sales and sales at clothing and footwear stores helped offset these declines. The ONS acknowledged past data errors and outlined plans for improvement moving forward.
Retailers attributed the strong sales growth in July to factors like new product releases, the warm weather, and the UEFA Women’s Euro 2025 tournament. Consumers took advantage of the sunny days to update their summer wardrobes and invest in items like air conditioners and fans. However, economists cautioned that the temporary boosts from these factors may not be sustained, and concerns about potential tax increases ahead of the November Budget could impact the retail sector.
Looking ahead, the future of retail sales growth will depend significantly on consumer sentiment. While households may be inclined to spend more after a period of caution, challenges like slower earnings growth, higher inflation, and increased costs could dampen real income growth moving forward. Businesses have also faced additional financial burdens, such as higher National Insurance contributions and minimum wage requirements, putting pressure on the retail industry
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