Retail sales experienced a decline of 1.2% in July due to the dampening effect of wet weather on summer clothing sales and the impact of rising living costs on food shoppers.
The Office for National Statistics (ONS) reported that this was a particularly challenging month for supermarkets.
"The combination of the summer washout and increased living costs led to sluggish sales in both clothing and food," the ONS stated.
Department stores also observed reduced demand for household goods.
Highlighting the extent of price increases, the ONS pointed out that in comparison to February 2020 - the last complete month before the onset of the Covid pandemic - total retail sales saw a 16.4% rise in value but a 1.8% decrease in the volume of goods purchased.
Earlier this week, fresh data indicated a slowdown in inflation to 6.8%. However, food prices continue to rise at a significant rate.
The ONS noted a decline of 2.6% in sales volumes at supermarkets in July following an increase in June.
It explained that "some of the decline was due to poor weather affecting summer clothing sales. Additionally, food sales in supermarkets also experienced a setback."
Retail sales between June and July saw a larger drop than anticipated. Economists had predicted a decrease of about 0.6%.
Ruth Gregory, Deputy Chief UK Economist at Capital Economics, expressed caution about interpreting the retail sales figures too strongly, stating that "last month being the sixth wettest July since records began in 1836" played a significant role.
"However, with the Bank of England's interest rate hikes still taking effect and consumer confidence declining, we remain cautious about the outlook for overall spending this year," she added.
Inflation slows down, but air travel and hotel costs remain high How much are prices rising for you? Try our calculator Department stores reported a decline of 2.9% in sales volumes between June and July. Alongside clothing, a reduction in demand for furniture and lighting was also observed.
For some retailers, the inclement weather prompted customers to change their purchasing habits.
Gary Grant, Founder and Chairman of The Entertainer toy retailer, told the BBC's Today program that parents had spent more on items to keep children occupied indoors during the rainy weather.
While outdoor toy sales were "significantly down" compared to the previous year, "indoor sales, including stationery items, craft items, puzzles, and games – things to keep children entertained indoors – have increased," he explained.
The rain also benefitted online retailers as shoppers opted to stay home, resulting in a 2.8% rise in online sales in July.
In total, the share of retail sales conducted online last month reached 27.4%, the highest since February, up from 26% in June.
Meanwhile, the ONS revised the growth in retail sales for June from a 0.7% increase to a 0.6% rise.
Silvia Rindone, Managing Partner of Strategy and Transactions at accountancy firm EY, suggested that sales could rebound in August as families prepare for the upcoming school year.
"Retailers should see sales improve in August as families start shopping for the start of the new school year in September. 'Back to school' is often a high-spending season in retail after Christmas," she noted.
Looking ahead to the holiday season, Grant indicated that people tend to delay major purchases until the final months of the year.
While The Entertainer is currently benefiting from the popularity of the Barbie film, particularly in sales of dolls and clothing, items like Barbie's caravan or house, which can cost up to £300, are expected to be "big Christmas presents," he said. Photo by Thomas Blomberg, Wikimedia commons.