51乱伦

Key Messages

• Retail sales rebounded in June after May blip
• YoY retail sales values +3.5%, volumes +1.8%
• But leveraged off a weak YoY comp
• MoM volume growth +0.9% lower than economist consensus (+1.2%)
• Q2 retail sales values +3.2% an acceleration on Q1 (+2.1%)
• Likewise Q2 retail sales volumes (+1.9% vs +1.1%)
• Weather boosts grocery sales (vals +2.9%, vols -0.7%)
• Non-food sales growth strong (vals +3.6%, vols +3.2%)
• Electricals, Carpets, Charity Shops, Jewellers standout categories
• Strong performance from Clothing (vals +5.4%, vols +4.5%)
• Challenging month for Textiles, Chemists, Footwear=
• Online sales grow +2.3% MoM and +4.5 YoY
• Online penetration increases by +40bps to 27.8%
• KF upgrades FY 2025 forecasts to vals +3.0% and vols +2.0%.

So, May was just a bad dream for retail. Retail sales rebounded in June, helped in no small measure by the weather. But not enough to placate the economist community, who somehow saw the figures as 鈥渄isappointing鈥�.

The headline stats

鈥�Retail sales volumes (quantity bought) are estimated to have risen by +0.9% in June 2025, following a fall of -2.8% in May 2025 (revised down from a fall of -2.7% in our last bulletin). Food store sales rose following a fall in May 2025, with retailers reporting the warm weather had a positive effect. More broadly, sales volumes rose by +0.2% in Quarter 2 (Apr to June) 2025 when compared with Quarter 1 (Jan to Mar) 2025.鈥�

So terse is the ONS headline commentary these days it can be quoted verbatim. Essentially, retail sales volumes grew month-on-month (MoM) +0.9% and quarter-on-quarter (QoQ) by +0.2%. Economists seem upset as 1. June鈥檚 gain did not offset May鈥檚 loss (-2.7%). 2. They got it wrong (again). Consensus forecasts had been for MoM growth of +1.2%. And the former point doesn鈥檛 take into account that May鈥檚 MoM figures were distorted by a strong April.

Above all else, this again underlines the limitations of honing in on MoM performance, obsessing only about retail sales volumes and expecting a highly seasonal (and volatile) market to behave in predictable and rational way.

What the figures actually say

The far more meaningful year-on-year (YoY) figures show that retail sales values (exc fuel) grew by +3.5% in June, a decent recovery on the flat YoY performance in May (revised up from a decline of -0.1%, as previously reported). Retail sales volumes (exc fuel) grew +1.8%, again a sharp turnaround on May (-1.2%, revised up from -1.3%).

As predicted, on this evidence, May was largely a blip, rather than the shape of things to come. June鈥檚 figures weren鈥檛 universally positive by any means, but in the round, they show no signs of a consumer slowdown. The one slight caveat is that this growth was leveraged off a weak comp base last year (June 2024: values -0.3%, volumes -2.1%).

An exceptional April, a rubbish May and a decent June 鈥� all these peaks and troughs come out in the wash of the figures for Q2 as a whole. Retail sales values in Q2 grew +3.2% YoY, with volumes ahead by +1.9%. In both cases, this marked a positive acceleration on Q1 (vals +2.1%, vols +1.1%). And implied shop price inflation remained at very manageable levels in Q2 (+1.3%). It鈥檚 hard to see what economists are so disappointed about.

Performance by sector

Perhaps it was the fact that the weather (something they are unable to predict) had such an undeniably strong influence on the June figures. One of the key barometers of this is always the performance of the grocery market. Foodstore values grew by +2.9% in June, a little lower than other data sources e.g. Kantar have suggested, but still a sharp turnaround on the performance in May (-0.1%). But on the negative side, volume growth still remains elusive in food (-0.7% YoY) and implied inflation remains on the rise (+3.6%).

Performance in non-food was slightly stronger (YoY values +3.6%, volumes +3.2%), with the plus point that even non-food is now inflationary (+0.4%). And, yes, you did read that right, low inflation being a much healthier state of affairs for retail than deflation.

The usual disparities between individual sub-sectors. Medical Goods were the best performing sub-sector (values +25.7%, volumes +18.4%), but sister sector Dispensing Chemists (-11.8%, -16.2%) were the second worst performing category (and you鈥檇 have to ask the ONS what the difference is between the two).

Electricals (+17.8%, +20.0%), Charity Shops (+16.0%, +16.1%), Carpets (+6.7%, +6.2%) and Jewellery (+6.5%, +1.6%) all had strong months. But perhaps the most positive takeaway from the June figures was the performance of Clothing (+5.4%, +4.5%), which was achieved without excessive discounting (implied inflation being +0.9%). Long may this continue.

At the other end of the performance spectrum, another very challenging month for Textiles (values -25.6%, volumes -26.5%), Cosmetics (-7.3%, -8.1%), Garden Centres (-6.4%, -6.5%), Footwear (-5.1%, -3.9%), Books (-2.3%, -3.7%) and Sports (-2.0%, -2.0%). As previously stated, the headline retail sales figures were good, but performance was not universally strong across the high street.

Online spend grew by +2.3% MoM and +4.5% YoY. In both cases, this was higher than overall retail spend (+1.1%, +3.5%), so online penetration rose from 27.4% in May to 27.8% in June. This is +30bps higher than it was a year ago (June 2024: 27.5%).

For more detail please refer to the accompanying Retail Sales Dashboard.

Wider context

More than half the year down already and maybe time for some interim reflection. The first half of the year saw a huge amount of noise in the global geopolitical arena which is showing no signs of dying down anytime soon. All the talk on tariffs and spiraling inflation is ongoing. In the meantime, many of the anti-retail realities of last year鈥檚 Autumn Budget came fully into force in April. The mood coming into this year was anything but positive.

But the UK consumer has remained resilient. Only in one month (May) was there a discernible sign of a consumer slowdown and the evidence since suggests that this was a temporary blip. Retail sales values and, more importantly, volumes remain firmly in growth territory.

At the end of last year, we predicted that retail sales values for 2025 FY would be ca. +2.5%, with volumes slightly lower (+2.0%). With the benefit of half a year鈥檚 figures, these projections remain broadly on track (H1 vals ca.+2.7%, vols ca. +1.5%). If revisiting, I would probably upgrade my values prediction to +3.0% for the year as a whole and keep volumes at +2.0%.

Those that were maybe deafened by the global geopolitical noise said we were too bullish in our retail sales projections at the beginning of the year. The fact that we are now nudging them up rather than down says a lot in itself.