ONS Retail Sales July 2021

Retail sales (value, non-seasonally adjusted, exc. fuel) rose by 3.7% year-on-year (YoY) in July, against a 2.9% uplift a year earlier, according to the latest ONS data.
Compared to the previous month, retail sales volumes (seasonally adjusted, exc. fuel) fell 2.4% in July - the worst performance since January when the UK returned to lockdown. Mixed weather and large numbers of people being forced to self-isolate amidst the fast-spreading Delta variant, dragged on sales.
Whilst some of the momentum from reopening has been lost, retail sales continue to recover on the whole. This is shown by the three-month-on-three-month growth rate, which was up by 5.7% in the quarter to July (value, seasonally adjusted).

Retail sales (volume, seasonally adjusted) – 3-months on previous 3-months

Source: ONS

Food

Compared to the same period a year earlier, Food store sales rose by 1.2% YoY in July (volume, seasonally adjusted), a solid but somewhat unimpressive performance.
Food store sales volumes fell by 1.5% against the previous month, when food sales were positively boosted by the Euro 2020 football championship.
Spending in supermarkets was also impacted by consumers heading to pubs and dining out more frequently after the lifting of almost all Covid restrictions on ‘Freedom Day’ on 19 July.

Non-food

Non-food store sales volumes were up 5.9% YoY, a reflection of continued pent-up demand for certain retail sectors, notably clothing and footwear (+16.9%) as social gatherings make a comeback.
However, on a month-on-month basis, non-food stores saw a 4.4% drop in sales volumes in July, driven by strong decline in other stores (-10.1%), such as those selling computers and telecoms.

Online

After hitting a pandemic low in June, online penetration unexpectedly ticked higher in July. The proportion of retail sales made online rose to 26.4%, up from 26.2% in June. This remains substantially higher than pre-Covid levels (19.1% in Feb 2020)
Online sales (non-seasonally adjusted, exc. fuel) declined by only 3.1% YoY in July, despite extremely strong comparisons from a year earlier when online sales surged 55.6%.

Retail sales price deflator

The retail sales deflator (a measure of inflation specific to retail) excluding fuel increased by 1.6% compared to last year, and rose 2.8% when including fuel.
The implied price deflator among food stores edged up by 0.4% YoY, and rose by 2.4% among non-food stores, a slight easing on June.