LAST month's heatwave boosted demand for summer clothes and gave UK retailers something to cheer about as consumers continue to keep a tight grip on their purse strings.
New figures from the Office for National Statistics (ONS), released yesterday, showed retail sales volumes rose 1.2 per cent between May and June. The largest increase came from clothing and footwear stores – up 4.7 per cent over the month.
The he
adline month-on-month rise was much higher than the 0.3 per cent improvement forecast in the City.
The clothing-led sales boost followed survey data from the British Retail Consortium last week which showed non-food sales enjoying their best month since October last year.
Vicky Redwood, an economist with Capital Economics, said: "The high street has been holding up surprisingly well since the start of this year."
CEBR economist Ruth Flint said the temporary VAT cut, due to be reversed at the end of the year, and heavy discounting were "sure to have supported consumption".
She added: "Consumers have thus far shown resilience in the face of the recession by not tightening their belts as much as one might have deemed appropriate in the current climate.
"However, future falls in consumption still remain on the horizon as unemployment continues to rise and wage growth remains weak."
The ONS data revealed that shoppers were more willing to spend money on clothes than household goods. Electrical goods and hardware stores led a 0.7 per cent decline for the sector over the month.
Household goods stores have now seen 12 successive months of decline as a weaker property market bears down on trading.
Sales volumes in the three months to June are still 1.3 per cent higher than the same period a year ago, the ONS noted, despite the UK's descent into recession. Some experts put this down to people on tracker mortgages benefiting from low payments after the Bank of England sliced interest rates to a record low of 0.5 per cent.
Deloitte Scotland partner and retail expert Jim Boyle welcomed signs of stability on the high street, but said the latest figures may mask "the scale of the challenges facing UK retail".
"Until now, younger consumers had offered one bright spot in an otherwise gloomy year as they proved resilient to the recession," he added.
"But with one in six 18- to 24-year-olds now out of work this bubble may be about to burst."
British Retail Consortium director-general Stephen Robertson said the data confirmed his organisation's findings that June's retail sales were "boosted by sunshine, promotions and discounts".
But he added: "The wholesale turnaround in consumer confidence retailers are looking for remains elusive. Given that uncertainty about jobs is sure to go on rising well into next year, even the sunny weather can't provide enough of a feel-good factor to ease nervousness about spending on big-ticket items.
"Lower mortgage costs and energy prices are leaving a lot of people better off than a year ago. But many still favour saving over spending."
