British consumers curb their shopping in rainy July
By William Schomberg and William James
LONDON (Reuters) -British retailers reported a bigger-than-expected drop in sales in July as heavy rain put off shoppers who are also feeling the hit from high inflation and 14 back-to-back increases in interest rates.
Official data showed sales volumes last month were 1.2% lower than in June. Economists polled by Reuters had forecast a 0.5% drop.
Sterling weakened as investors assessed how much the sales drop represented a warning sign about a slowdown in Britain's sluggish economy, beyond the hit caused by the sixth-wettest July in records dating back to 1836.
«It was a particularly bad month for supermarkets as the summer washout combined with the increased cost of living meant sluggish sales for both clothing and food,» Heather Bovill, deputy director for surveys and economic indicators at the Office for National Statistics (ONS), said.
«Department store and household goods sales also dropped significantly.»
Many shoppers went online rather than venture out into the rain with 27.4% of retail sales taking place via the internet, up from 26.0% in June and the highest share since February 2022.
Food stores sales volumes fell by a monthly 2.6% while non-food stores sales volumes fell by 1.7%.
The drop followed a strong June for retailers who were boosted by a heat-wave.
As well as the unpredictability of Britain's weather, consumers have been hit by high inflation which stood at almost 7% last month, down from a peak of about 11% last October but still the highest among the world's large rich economies.
However, July's data represented only the second time that sales volumes fell on a month-to-month basis so far in 2023, suggesting resilience in consumer demand.
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