Online spending boosted retail sales in the UK over the past month, while department stores rose for the first time this year as consumers shook off Brexit fears.
According to the National Statistics Office, the volume of goods purchased rose by 0.2% in July, supported by the annual Amazon Prime Day. The numbers follow a 1% increase in June, the disorderly urban economists who had expected a decline of 0.2%.
In the three months to July, retail sales increased 0.5% compared to the previous three months, after 0.7% in the previous three months.
Rhys Murphy, the retailer of ONS retail store, said he had grown only marginally in the last three months. "Although there was still a decline in the quarter, July saw sales rise for the first time," she said. "The strong growth in online sales during the month was driven by promotions."
Non-retail retail, such as Internet shopping and mail order, grew 6.9% last month, the largest increase since May 2016. Amazon held its summer sale on July 15, and other retailers also offered price cuts.
The main street is shaken by a long-term shift in shopping habits as consumers increasingly shop online instead of visiting local shops. One bright spot was the highly competitive department store sector, where sales rose 1.6% in July, ending the six-month decline.
Elsewhere, the picture was less rosy. Food sales remained unchanged, apparel and footwear businesses declined 0.2%, and homewares sellers declined 5.4% due to the weaker housing market.
Samuel Tombs, UK chief economist at Pantheon Macroeconomics, said the numbers showed consumers were not worried until the Brexit deadline.
"Admittedly, Amazon's Prime Day, which the retailer has been running every July since 2015, was most likely responsible for the huge 6.9% increase in non-business revenue compared to the previous month, which contributed 0.7 percentage points to growth overall Sales, "he said.
"Sales volumes are expected to decline in August as some buyers have probably preferred their planned purchases to take advantage of Amazon's temporary discounts. Nevertheless, we believe that consumers can rest assured that they are stabilizing the ship. "
Others said consumer spending was also buoyed by the heatwave in July and were skeptical that consumers would continue to spend so much as the Brexit deadline on 31 October was approaching.
Gabriella Dickens, an economics assistant at Capital Economics, predicted that household spending would last as long as a Brexit could be avoided without an agreement. "Future prospects depend on what happens to Brexit. If there is no Brexit without agreements, consumer spending growth is likely to decline, "she said.