THE HOPE for an Olympic retail boom failed to materialise in August, as retail sales barely changed, despite heavy discounting in many sectors.
Retail sales volumes edged down 0.2 per cent into August, the Office for National Statistics revealed yesterday, having crept up 0.3 per cent between June and July.
The amount spent in shops inched up 0.2 per cent last month, after rising 0.7 per cent in July. However most of this was due to rising petrol prices – both volumes and values fell, excluding fuel spending.
The longer term trend was upwards in both metrics, in spite of the flat monthly picture – volumes were 2.7 per cent higher than August last year, while the value of sales was three per cent up on the same month in 2011.
But analysts said there was no guarantee that the trend in retail sales was upwards. “The fundamentals underpinning consumer spending are still unsupportive,” said Mark Gregory, top economist at Ernst & Young.
“Inflation, which had been easing rapidly over the past couple of months, seems set to level off...delaying the anticipated pickup in consumers' spending power.,” he added.
“These factors suggest that conditions for UK retailers are likely to remain tough in the near-term,” Gregory went on.
Despite the rise in fuel prices, annual store price inflation stood at just 0.2 per cent in August, almost completely flat due to months of heavy discounting, especially in clothing.