UK retail sales jump in August

UK retail sales enjoyed a robust performance in August, with volumes rising by 1%, surpassing economists’ forecasts, according to the Office for National Statistics (ONS).

The latest figures mark a continued recovery, following a 0.7% increase in July, and lift year-on-year sales by 2.5%. This outpaced the City consensus of a 1.4% rise.

August’s gains were driven by favourable weather conditions, which boosted demand for clothing and supermarket purchases. Textile, clothing, and footwear stores led the charge, posting a 2.9% increase in sales, while food retailers also saw a notable 1.8% rise.

ONS chief economist Grant Fitzner said: “Retail sales rose in August as warmer weather and end of season promotions helped to boost sales, most notably for clothing and food shops. Supermarkets, in particular, contributed to the largest annual rise for food sales since the summer of 2021.

“Looking at the broader picture, retail sales have also increased across the three month and annual period, following strong growth from online retailers. However, sales overall remain slightly below their pre-pandemic level.”

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Food stores sales volumes rose by 1.8% in August 2024, following a rise of 0.3% in July 2024. Compared with August 2023, sales volumes rose by 0.6%, the largest yearly increase since July 2021.

Non-food stores sales volumes, the total of department, clothing, household and other non-food stores, rose by 0.6% in August 2024, with clothing stores having the largest impact.

Sales in the three months to August grew 1.2% compared with the previous quarter and by 1.0% year-on-year.

Phil Monkhouse, UK country manager at global financial services firm Ebury, said: “Consumers seem to be finding their footing, bolstered by the Bank of England’s first rate cut since 2020, which has eased mortgage pressures and sparked renewed confidence in the UK’s economic outlook.

“With summer now over, retailers will now need to focus on sustaining growth ahead of the autumnal weather threatening future footfall.

“Alongside utilising the back-to-school season, agile strategies to meet consumer demand and adopting hedging strategies to protect against international disruptions will help businesses navigate any challenges in the months ahead.”

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However, consumer confidence appears to have taken a big hit in the run-up to next month’s budget.

GfK’s long-running barometer slumped by seven points in September to minus 20, taking the survey back to levels seen at the beginning of the year.

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Kris Hamer, director of Insight at the British Retail Consortium, said: “Clearly, the high cost of living still bears down on consumers, meaning demand may dip further when energy bills rise once again in October.

“On top of difficult trading, retail faces a disproportionate tax burden compared to other industries, holding back investment, and contributing to a decline in shops and jobs.”

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