World Cup gives retailers a kicking as sales dry up

Russell Lynch
World Cup football kept shoppers away from non-food retailers in June 2018: REUTERS

Britons pushed barbecues and football to the top of the list last month as retail sales suffered, official figures revealed on Thursday.

The third driest June for more than a century and the attractions of the World Cup kept shoppers away from the High Street as sales volumes slid 0.6%, much more sharply than expected, after a strong April and May.

The shock figures initially pushed sterling below the $1.30 mark for the first time since last September, although supermarkets cashing in on the good weather managed to avoid the sales slump affecting non-food rivals.

The stunning summer has delivered major grocers their best sales for 17 years in the past three months.

June’s weakness looks unlikely to deter the Bank of England from an interest rate rise next month.

Overall retail sales are still up 2.1% between April and June, marking the strongest result for a calendar quarter since 2004, while the wider economy is showing signs of faster growth after the weather-related blip at the start of the year.

Unemployment remains low and the only potential pause for thought on the monetary policy committee will be given by inflation, which unexpectedly stayed at 2.4% last month.

Ruth Gregory, senior UK economist at Capital Economics, said: “While this week’s inflation figures have made the outlook for an interest rate rise in August rather less clear-cut, the recovery in the consumer sector supports our view that a hike is still more likely than not.”

Oliver Wyman retail partner Nick Harrison, however, warned household finances were still under pressure, which suggested “a post-summer hangover is on its way”.