MNI DATA IMPACT: UK June Retail Sale Regain Pre-Pandemic Level

UK retail activity rebounded smartly in June, with non-fuel sales exceeding pre-pandemic levels, suggesting the economic paralysis over the second quarter may have been less severe than feared.

The following are the main points from the June retail sales report released by the Office for National Statistics Friday.

• Retail sales jumped by 13.9% between May and June, far outpacing forecasts of an 8.3% gain, although sales remained 1.6% below the level of June 2019.
  
• Excluding fuel, sales increased by 13.5%, or by an annual rate of 1.7%. That takes ex-fuel retail activity 2.4% above the level of February, before the economic lockdown took effect in March. Sales at food stores and at non-store retailers have also regained pre-pandemic levels.
  
• Sales slumped 9.5% between April and June, a record-fall over a calendar quarter in a series dating back to mid-1996. However, that's a more shallow decline than the 12.7% slump of May (on a rolling three-month basis). Retail sales are set to subtract 0.51 percentage points from second quarter GDP, a less-severe hit than expected, given that non-essential retailers only reopened in the final weeks of the quarter.
  
• The better-than-expected sales figures reinforce recent comments from Bank of England Chief Economist Andy Haldane who believes the UK is experiencing a 'V-shaped' recovery.
  
• However, retailers did report that footfall remained low in June, according to an ONS official, raising questions over the sustainability of the retail revival.
  
• Internet activity continues to power the retail recovery, despite the reopening of shops from June 15th. Internet sales -- measured by value -- rose by 8.2% in June, and by 72.7% over the same month of 2019, well above the annual rate of 57.8% in May. Internet sales slipped to 31.8% of total retail activity from a record high of 33.3% in May, reflecting the reopening of physical shops at mid month.
  
• Data for the June retail sales report were collected between May 31 and July 4.