British retail sales defy forecasts with surprise August rise
UK retail sales unexpectedly rose in August, defying forecasts of a decline. Despite renewed pressure from higher fuel prices, hot weather drove a strong rebound in both online shopping and department store sales.
Economists had expected sales to fall 0.2 per cent but sales volumes rose 0.5 per cent during the month, reversing a 0.5 per cent decline in July, the Office for National Statistics (ONS) said.
Online retailers helped drive the surprise rise, recovering from a weaker July after promotions pulled spending forward into June. Online spending jumped 2.5 per cent after falling 4.2 per cent in July, taking its share of total retail spending from 28.4 per cent to 28.8 per cent.
Department stores also bounced back after stock shortages hit sales the previous month, while clothing retailers recovered some of July’s decline. Overall non-food sales rose 0.6 per cent.
Sandra Prince, head of consumer at Lloyds, said August’s warm weather delayed the usual shift toward autumn purchases, while the late bank holiday weekend and back-to-school shopping likely supported demand.
“Retailers have worked hard to attract shoppers through promotions and seasonal offers”, she said, but added that many households were still “carefully balancing their budgets and prioritising where their money goes”.
Sales volumes rose 0.9 per cent across the three months to August, helped by strong food sales and an earlier boost from the hot weather and World Cup.
Fans, air conditioning units, sports merchandise and clothing sold strongly in June, while supermarkets performed well in July and August.
Fuel prices weigh on shoppers
The surprise August rise came despite another squeeze at the petrol pump, with fuel sales dropping 1.3 per cent in August as prices rose sharply.
Retailers told the ONS that higher prices appeared to be changing behaviour, with some motorists only partially filling their tanks.
Andy Carlisle, consumer goods and retail lead at Accenture, said the figures would still be a “slight disappointment” for retailers hoping for a stronger summer finish. “Spending lost momentum as the boost from the earlier hot weather faded, and rising household costs encouraged shoppers to tighten their purse strings”, he said.
Carlisle said higher energy bills and food, fuel and transport costs were leading shoppers to prioritise essentials and become more cautious over bigger purchases ahead of the crucial run-up to Christmas.
Retail sales volumes nevertheless finished August at their second-highest level since April 2022, narrowly below the level reached in June.