Partying England fans helped drive a rebound in retail sales last month with volumes up by 0.5 per cent.
Food and drink sales surged in June with economists saying people were stocking up during the Euros tournament.
The overall month-on-month increase defied the expectations of analysts, who had forecast a flat performance.
Despite a surprise dip in May, retail volumes are now 9.5 per cent above their pre-pandemic level from February last year.
The consumer boom has been helping UK plc to regain ground after coronavirus wreaked havoc, but there are also concerns it might push inflation higher.
Partying England fans helped drive a rebound in retail sales last month with volumes up by 0.5 per cent
Darren Morgan, ONS director of economic statistics, said: ‘June’s retail sales have picked up again following the dip seen last month, with the main driver coming from food and drink sales, boosted by football fans across Britain enjoying the Euros.
‘Although not quite back to their pre-pandemic level, fuel sales rose again this month as people increased the amount they travel, so are spending more at the pump.’
Non-food stores reported a 1.7 per cent month-on-month fall in sales volumes in June, with furniture and clothing dropping away.
Car fuel sales rose 2.3 per cent, but are still 2.1 per cent below their pre-coronavirus level.
Oliver Vernon-Harcourt, head of retail at Deloitte, said: ‘Consumers are feeling confident and there is pent up demand and a willingness to spend.
‘This should be reflected in July’s retail sales figures; another summer of staycations will have a positive effect across the UK’s regions and warmer weather and the lifting of restrictions will give a further boost to retail spending…
‘However, the retail sector is not out of the woods yet, and there are significant challenges that are making it hard to match the supply-side with the increased demand.
Food sales were the main factor in the increase in overall retail volumes in June
‘Not only are stores having to work hard to reassure consumers that they can shop in a safe environment, but the industry is also suffering from staffing shortages across the supply chain – in stores, warehouses and delivery vans – and this could put the brakes on an economic recovery.’
Jace Tyrrell, chief executive at New West End Company, which represents 600 businesses on Oxford Street, Regent Street, Bond Street and in Mayfair, said: ‘The slight rise in retail sales provides a splash of hope for retailers everywhere, however we are by no means out of the woods.
‘The end of restrictions has seen footfall in the West End rise by 3 per cent week on week, but it is still a long way off the traffic and spend that is needed to reinvigorate businesses.
‘There are a few reasons to be optimistic with many people choosing London as the prime destination for their summer staycation and people gradually returning to offices, but, while safety is of course top priority, we need much larger volumes of visitors to the district.’
Analysis: Food sales sizzled in June as the Euros took over screens, while spending wanes in July
By SUSANNAH STREETER
The Euros kicked off a spell of celebratory spending as national teams progressed through the tournament, fans splashed the cash on food and alcohol.
Beers, pizza and BBQ treats flew off the shelves, boosting spending in food stores by 4.2%. That marked a turnaround compared to May when the re-opening of indoor dining led to a decline in retail food sales.
The fickle nature of our spending patterns has continued with spending on clothing falling out of fashion again, with volumes down by 4.8%. In many homes it seems the love of football overtook passion for other hobbies in June.
With eyes glued to screens for matches, the love affair with DIY seems to have waned. Household goods stores saw a fall in sales volumes of 10.9% in June although supply chain problems causing a shortage of popular goods on shelves may also be behind the drop compared to May.
Spending overall though on furniture and items for the home is still 15.8% above their pre-pandemic levels, indicating plenty of people are doing up their pads, partly because they still spend so much more time at home.
A new ethical trend of shopping appears to be developing with a rise in spending in charity shops accounting for a large part of the 8.6% growth in other non-food stores. With so many people clearing out pre-loved items, shoppers are going bargain hunting in stores, attracted by the triple benefits of contributing to a good cause, cutting down on waste and saving pounds.
The novelty of browsing in real instead of virtual stores hasn’t yet worn off. The amount of money we spent online fell in June by 4.7% compared with May, with shopping now entwined in our social lives once more.
Other research from the ONS this week showed that in July shoppers have continued to cool down from the hot pace of spending the sector saw in the spring. In the week to 15 July 2021, spending on debit and credit cards fell by 5 percentage points from the previous week, coming in at 92% of the level in February 2020. A fall in social spending is partly behind the drop, with people splashing less cash on restaurants, hotels and air travel.
People are clearly fed up with playing the traffic light guessing game and many have ditched plans for holidays abroad.
Delayable spending on goods like clothing and cars is also at 85% of the level in February 2020, indicating caution is once again becoming the name of the game, as concerns about the spread of new variants rise.
Data indicates that fortunes are looking up a little for the high street as more customers return, partly as football fever has subsided.
The latest ONS economic report highlights Springboard research which shows that high street footfall in the week ending July 17th saw a weekly increase of 3%, its first rise since the beginning of June 2021, creeping back up to 70% of pre-pandemic levels.
But retail parks remain the most popular location to splash the cash. Footfall has bounced back in out of town centres to 99% of levels witnessed before the crisis hit.
Susannah Streeter is a senior investment and markets analyst at Hargreaves Lansdown
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