Retail Sales in June: A Sunny Surge
After a gloomy May where month‑on‑month sales fell by 2.7%, the June figures came in cooler at a modest +0.9%, suggesting the sector is beginning to find its footing again. It’s not a full rebound, but it’s a step in the right direction.
What’s Behind the Upswing?
- Weather’s Warming the Streets – June’s heat and sunshine made shopping a more pleasant outing, giving high streets a boost.
- Money‑Making Move by the Bank of England – A rate cut in May lowered mortgage costs, freeing up disposable income for shoppers.
- Tariff Triumvirate – The shock of aggressive global tariffs in spring has begun to subside, allowing retailers to readjust.
- Electronics Reboot – Sales of tech gear stalled earlier but see a revival, hinting that confidence has started to return.
Cost‑Crunching Challenges Ahead
Retailers are feeling the pinches from rising operational costs:
- Higher National Insurance contributions for staff.
- New minimum wage hike squeezing wages further.
- Reduced 75% discount on business rates to 40% (effective from April).
With margins tightening, many are trimming fixed costs or closing stores. Poundland, for example, is bracing for the possibility of closing up to 150 of its 800 locations in the next few years. If retailers choose to stay open, they’ll likely pass expenses on through higher prices, curbing consumer demand.
Keep Your Finger on the Pulse
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