Restaurants hit by August wash out as firms pray for sunny September rebound
Restaurants were hit hard by the wet weather in August suffering a 5.8 per cent monthly decline in sales, new data has revealed.
The wider hospitality sector also struggled last month, as spending in bars, pubs and clubs rose by only 2.8 per cent on July – the lowest rate of growth since October 2022, according to new data from Barclays.
However, spending across the wider retail sector appeared to hold steady.
UK total retail sales increased by 4.1 per cent in August, separate figures from the British Retail Consortium (BRC) showed. This was above the three month average growth of 3.6 per cent and in line with the 12-month average growth of 4.1 per cent.
However, non-food sales decreased 0.2 per cent on a total basis over the three-months to August, taking it below the 12 month average growth of 0.9 per cent.
“Clothing and footwear saw weaker growth as families held back spending on children’s uniforms and other back-to-school goods until the last minute,” Helen Dickinson, chief of the BRC, said.
Abbas Khan, UK economist at Barclays, said that “muted spending growth in August is in line with other data sources, such as soft PMIs and stalling consumer confidence” and suggested that “the bite from monetary tightening is starting to be felt more acutely”.
Businesses on the high street will be hoping the delayed sunny weather set to spill across the UK in early September will drive sales up.
“With August proving to be a damp squib for high street and hospitality sales, retailers, restaurants, and pubs will hope that the unseasonably warm weather will fuel a rebound in September,” Myron Jobson, senior personal finance analyst at Interactive Investor, told City A.M.
“Robust wage growth as well as waning inflation could prop up retail sales, but the fact of the matter is the budgets remain tight,” he said.
He added: “High inflation continues to sap consumer confidence and purchasing power. So, retailers need to be making hay while the sun is still shining before shoppers readjust their spending habits to stay in the black.”