ONS Retail Sales July 2022

Retail sales (value, non-seasonally adjusted, exc. fuel) rose at its strongest rate since March at 5.7% year-on-year (YoY) growth in July, supported by warm weather and online mega sales, against a 2.8% rise a year earlier according to the latest ONS data.
In volume terms, retail sales fell by 3.0% YoY in July, against a modest rise of 1.2% a year ago (non-seasonally adjusted, exc. fuel). It follows a 6.3% decline in June.
The three-month-on-three-month volume rate declined by 1.1% in the quarter to July (volume, seasonally adjusted).

Retail sales value and volume growth has detached

Source: ONS, Retail Economics analysis

Note: all retail sales figures provided below are non-seasonally adjusted, excluding Fuel, unless stated otherwise.

Food and non-food

Food store sales rose by 6.2% in July, compared to a 2.3% rise a year earlier. Growth was driven by rising food prices, with food volumes down 4.2% on last year.
Clothing continued to see double-digit rises, with sales up by 13.5% YoY in July compared to 16.7% growth in the previous year. Demand was supported by the exceptionally warm weather and summer holidays abroad. Volumes rose by 5.4% YoY in July.
Consumers looking to cut back on non-essentials are focusing on home-related categories over the summer months. Furniture and Lighting stores sales edged up just 2.5% YoY in July against a 4.9% rise a year earlier. Volume declines deepened to -8.8% YoY in the month.
Household Goods sales declined by 5.9% during the month, against 6.1% growth last year. After accounting for inflation, volumes remained in double-digit decline at -14.8% YoY in July.

Online

Online sales declined by 4.2% YoY in July, marking its best performance this year. It compares to a soft 1.5% rise a year earlier.
Non-store retailing (a proxy for pureplay retailers) saw sales edge up 0.4% YoY, driven by Amazon’s Prime Day in July.
All other online categories continued to record a decline in the month, with Household Goods (-9.8%) and Food (-12.2%) and non-specialised stores (-13.5%) seeing the deepest declines.
The proportion of retail sales made online remained broadly at a quarter of total sales in July – with the penetration rate at 25.3%, down from 28.0% a year earlier.

Retail sales price deflator

The retail sales deflator (a measure of inflation specific to retail) hit a record 8.9% YoY in July excluding fuel, and jumped 12.0% when including fuel as petrol and diesel prices rose further in the month.
The implied price deflator among food stores tipped into double-digits at 10.8%, marking a 2 percentage point increase on the previous month. Among non-food stores, the price deflator rose by 7.5% in July – broadly in line with June’s 7.4% rise.