Food store sales volumes plunged 2.6% in July following a 1.1% rise in June, as the cost-of-living crisis continues to put pressure on household budgets.
According to the latest findings from the Office of National Statistics (ONS), retail sales volumes are estimated to have fallen by 1.2% last month following a rise of 0.6% in June.
Supermarkets reported that some of the fall was due to the poor weather reducing summer clothing sales. However, food sales in supermarkets also fell back.
Customers switched to online shopping because of poor weather and increased promotions, meaning 27.4% of retail sales took place digitally in July 2023, up from 26% in June 2023 – the highest proportion since February 2022 (28%).
Automotive fuel stores sales volumes rose by 0.7% in July 2023, following a fall of 0.6% in June 2023.
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Retailers also indicated that the increased cost of living and food prices continued to affect sales volumes.
According to the ONS’ Consumer price inflation report, the price of food and non-alcoholic beverages increased by 14.9% in the 12 months to July 2023.
Food store sales volumes were also 5.1% below their pre-coronavirus (COVID-19) February 2020 levels.
Ruth Gregory, deputy chief UK economist at Capital Economics, told the BBC that the latest retail sales figures “had a lot to do with last month being the sixth wettest July since records began in 1836”.
“But with the Bank of England’s interest rate hikes still feeding through and consumer confidence falling, we remain downbeat on the outlook for overall spending this year,” she said.
The news comes as the chief economist of the Bank of England warned that food prices may never fall again after Russia launched its war in Ukraine.
