UK retail sales rise in second quarter as summer takes hold

British Retail Consortium numbers buck trend of weakening consumer spending

UK retail sales rebounded in the second quarter, climbing the most since 2013 as warm weather tempted shoppers, according to the British Retail Consortium.

Retail sales rose 2.1 per cent from a year earlier on a like-for-like basis, the consortium said on Tuesday.

Food sales jumped 3.6 per cent, while non-food expenditure increased 0.9 per cent.

While consumers have so far been a driver of growth since Britain's vote to leave the European Union last year, the BRC data bucks a recent weakening trend.


Shop sales plunged in May, according to the Office for National Statistics, and a report Monday by IHS Markit and Visa showed consumer spending posted its worst quarter since 2013 in the three months through June.

Welcome pickup

"The arrival of summer provided a welcome pickup to sales growth in June," said BRC chief executive Helen Dickinson. "There's a question mark over whether this spending momentum will last, as household expenditure is increasingly squeezed from rising inflation and slowing wage growth."

Despite the pickup, the UK economy grew a “sluggish” 0.3 per cent in the second quarter, according to estimates by PricewaterhouseCoopers.

"While retail sales growth has been somewhat stronger than in the first quarter, this is offset by slower estimated growth in transport, industrial production and construction," said chief economist John Hawksworth.

PwC’s estimate are based on its “nowcasting” model, which it says combines human judgment with artificial intelligence machine learning techniques, and has an accuracy of 94 per cent in predicting changes in direction of growth the past four years.

– (Bloomberg)