Retail sales nudge up in August

According to the BRC and KPMG Retail Sales Monitor, UK retail sales nudged upwards in August as non-food sales return to growth.

• In August, UK retail sales increased by 1.3% on a like-for-like basis from August 2016, when they had decreased 0.9% from the preceding year.
• On a total basis, sales rose 2.4% in August, against a decline of 0.3% in August 2016, which had been the poorest performance of the year. This is the strongest growth since Easter, above the 3-month and 12-month averages of 1.9% and 1.6% respectively.
• Over the three months to August 2017, In-store sales declined 1.4% on a Total basis and 1.9% on a Like-for-like basis.
• Over the three months to August, Food sales increased 1.8% on a like-for-like basis and 3.2% on a total basis. This continued to slow versus the 3 months to July of 3.4% but remained above the 12-month Total average growth of 2.7%.
• Over the three-months to August, Non-Food retail sales in the UK increased 0.6% on a like-for-like basis and 0.9% on a total basis, above the 12-month Total average growth of 0.6%.
• Online sales of Non-Food products grew 11.0% in August, above both the 3-month and 12-month averages of 9.8% and 8.8% respectively. Online penetration rate increased from 21.0% in August 2016 to 21.6% in August 2017.

Helen Dickinson OBE, Chief Executive, British Retail Consortium

“August provided a welcome pick-up in retail sales across channels, with Non-Food returning to growth as shoppers’ attentions turned to homewares, autumn clothing ranges and the new school term.

However, these figures tell a less positive story about the health of consumer spending than it might seem at first glance. Non-Food sales have only just recovered to levels seen two years ago, after a dismal August in 2016; while strong figures for food are largely the result of rising prices, leaving growth in volume terms weaker than last year.

Stark challenges lurk around the corner for the retail industry. Purchasing decisions are very much dictated by a shrinking pool of discretionary consumer spend, with the amount of money in people’s pockets set to be dented by inflation and statutory rises in employee pension contributions in a few months’ time. It’s therefore crucial to protect consumers wherever possible from further cost pressures. For Government, this includes ensuring continued choice and availability of affordable, quality products for shoppers post-Brexit, by securing a strong deal on customs and tariff-free trade with the EU.”

Don Williams, Retail Partner, KPMG

“Despite the ongoing challenges for the industry, retailers achieved reasonable growth in August, which is positive news for the industry. Even non-food categories experienced an uptick – a welcome relief given the poor performance recently.

“Retailers taught us a thing or two about Back to School, with children’s clothes and footwear obtaining top-marks in terms of sales. Elsewhere, growth in home improvement sales – including furniture – point to the influence of staycations, although it could also be that home furnishing retailers are not having to compete with the likes of the Olympics for attention this year.

“Mirroring the successes of the high street, online sales continued to go from strength to strength, with all categories noting growth.

“Retailers have managed to achieve stronger than expected growth, however adding to this could be the fact that consumers appear to be turning a blind eye to the potential crush on spending power to come. The industry now needs to overcome further devaluation of the pound and the increased costs therein.”

Joanne Denney-Finch, Chief Executive, IGD

“Food and grocery turned in another steady sales performance through August, despite the disappointing weather and the annual summer getaway.

“Shopper confidence has been building. 23 per cent expect to be financially better off over the next 12 months, compared with 20 per cent in the election month of June, and 17 per cent intend to focus more on quality in their grocery shopping rather than saving money, the highest level since last September.”

Source: Insight DIY Team & BRC/KPMG Retail Sales Monitor.

Image - courtesy of Shutterstock.

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