UK retail sales rise in July in spite of weak food sales, we would not put too much weight on today's outturn

The ONS estimates that 'core' retail sales volumes (excluding auto fuels) rose by 0.9% m/m in July, a stronger outturn than the consensus had expected (consensus: 0.2%, BarCap: -0.4%). Total retail sales, which include the volatile auto fuel component, were estimated to have risen by 1.1% m/m in July (consensus: 0.3%, BarCap: -0.5%).
 
Our forecast for a fall in core sales in July had been driven by the expectation of weaker food sales, which account for around 47% of core sales volumes. However, in spite of a marked fall in July food sales volumes (-1.0% m/m, against our forecast for a 0.5% m/m fall), a 1.8% m/m rise in non-food sales more than offset this. The strength in non-food sales can be accounted for by a 6.1% m/m rise in the ONS' catch-all 'other' category (the strongest monthly rise since February 2008). Unfortunately, due to the nature of this component - as opposed to more clearly defined components such as household goods - it is difficult to discern what this strength implies for retail sales in the coming months.
 
At the time of last month's release, we had noted that exceptional volatility meant these data were best considered at a broader horizon, and would not draw any strong conclusions from today's data.

source: BarCap