Wet weather brought online sales to highest level since pandemic despite tough month for retailers in July

Retail sales fell for only the second time this year in July as wet weather led to a surprise 1.2% drop, official figures show.

It's a steep fall from growth of 0.6% in June, according to data from the Office for National Statistics (ONS).

A contraction of 0.5% had been forecast.

Growth in how much people were buying was recorded in all months this year except for March, which the Met Office said was the wettest in 40 years.

July similarly had high rainfall. Parts of the North West - including Greater Manchester and Merseyside - had their wettest-ever July.

Lancashire was the wettest, recording 234.6mm of rainfall last month.

Footfall fell as a result of the weather, the ONS said.

People were drawn to online sales because of the rain - which grew to the highest proportion of all retail sales since the pandemic month of February 2022.

Last month 27.4% of retail sales took place online, up from 26% in June.

Online promotions were also credited for the increase. Amazon reported its highest-ever sales on its 'Prime Day' deals event.

The volume of retail sales also rose overall by 2.8%, which online retailers also attributed to promotions.

People even bought less food last month. Sales volumes at food stores fell by 2.6%.

Supermarkets reported the rain and rising prices reduced clothing and food sales.

Non-food stores also experienced a fall, of 1.7%, with categories such as furniture and lighting particularly hard hit.

Retail sales figures are important as household consumption is the largest expenditure across the UK economy.

Prime Minister Rishi Sunak set himself the goal to grow the economy as part of his five promises at the start of the year.

The latest figures play a role in monthly economic growth figures which track UK GDP (gross domestic product).

'A weather-related blip'

Economists have attributed the fall in retail sales to the weather, rather than inflation and the increased cost of borrowing from the Bank of England's rate hikes.

"Admittedly, we would be wary of reading too much into the drop," the deputy chief UK economist at Capital Economics, Ruth Gregory, said.

"The falls in department stores and clothing sales (which dropped by 2.9% month on month and 2.2% month on month respectively), had a lot to do with last month being the sixth wettest July since records began in 1836."

The fall was also described as "probably just a weather-related blip," by Pantheon Macroeconomics.

"The drop in overall sales would have been larger, were it not for a 2.8% month-to-month increase in non-store sales volumes, which probably was due to Amazon's Prime," Pantheon's chief UK economist, Samuel Tombs, added.

Despite the August rain, commentators believe this month's figures will be higher than July's.

"Retailers are hopeful that the coming months will provide a boost to spending, as England fans celebrate the Women's Football World Cup Final this weekend, families start their back-to-school shopping and university students ready themselves for the new academic year," said Helen Dickinson, the chief executive of the British Retail Consortium.