Retailers record unexpected dip in August sales

RETAILERS failed to match July’s strong activity last month, with a 0.9 per cent month-on-month drop in sales revealed by the Office for National Statistics (ONS) yesterday.

However, sales were still up in comparison to August 2012, rising by 2.1 per cent over the 12-month period.

August’s drop was driven by a decline in food sales which were down 2.7 per cent compared to July.

Over the year, most of the growth in sales has come from non-store retailing, with retail in stores adding less than a percentage point to the increase. Non-store retailing includes any stall or market sales outside of a shop, as well as online sales.

Spending on the internet made up the largest part of the increase in non-store sales, surging 22.5 per cent to £579.6m in August.

Nida Ali, economic adviser to EY’s Item Club, commented: “The overall trend remains one of an improving retail sector. We expect sales volumes to increase over the coming months as easing inflation and higher employment reduce the pressure on household finances. Consumer spending will still play a major role in a recovery that we believe to be in the process of broadening and becoming entrenched.”

Fil Adams-Mercer, founder of courier service Parcel2Go said that the internet had to be embraced if retailers were to survive: “The guard is changing, just as it did during the Industrial Revolution more than a century ago. Many brick-and-mortar merchants, even on the high street, will go the way of the buggy whip if they don’t adapt.”