Retailers blame ‘election uncertainty’ as sales drop in June

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Andrew Feinberg

White House Correspondent

Retailers said they had been hit by uncertainty around the election last month, as the quantity of products they sold fell more rapidly than expected.

New data showed that retail sales volumes shrank by 1.2% in June, which is twice the rate that economists had forecast. It was a drop from May’s 2.9% growth, the Office for National Statistics (ONS) said.

Shops that do not sell food, including clothes shops and department stores, showed a 2.1% fall during the month, down from a rise of 3.3% in May.

They blamed a mix of “election uncertainty, poor weather, and low footfall,” for their bad fortunes, the ONS said.

Out of the eight sectors that the ONS tracks in its retail figures only one, those that sell petrol and diesel, saw growth during the month, up 2.2%.

Food shops were the second-best performing category during the month, but even so sales fell 1.1% in June.

“Unfortunately June has been a washout for retail sales, with retailers yet to sustain two consecutive months of sales growth this year, with another slowdown after an uptick in May,” said Erin Brookes, an expert at consulting firm Alvarez & Marsal.

“The poor weather in June saw disappointing sales of summer goods including across food and clothing. This comes despite significant discounting and deflation in fashion retail, with volumes remaining stagnant.

“Looking ahead, England reaching the final of the Euros, and the start of the school holiday, may have driven sales higher in July, but retailers will be concerned about structural volume decline against a backdrop of intensifying competition.

“With tourism to potentially offer some sales uplift over the summer, retailers must look ahead and plan activities for the back half of the calendar year to ensure performance.”