Retail sales growth slowed in August amid recovery warnings
Retail sales growth has started to slow as shoppers’ pent-up enthusiasm has softened this summer.
Total sales increased by 3 per cent in August, below the three month average growth of 6.9 per cent.
Clothing retailers reported strong performances as Brits looked to stock up their post-lockdown wardrobes with outfits for weddings and returning to the office, according to the BRC-KPMG monitor.
Retail sales in the UK were up 1.5 per cent on a like-for-like basis from August 2020, below the three month average growth of 4.5 per cent and a 12-month average growth of 10.9 per cent.
In-store sales of non-food items grew 23.7 per cent on a total basis over the three months to August with clothing, footwear and accessories performing well.
Food sales growth was dented by the full re-opening of hospitality with sales increasing 2.9 per cent on a total basis over the three months to August. This was below the 12 month total average growth of 5.4 per cent.
Shoppers were still keen to buy clothes and other items online, signifying the pandemic’s impact on the move away from in-store purchases.
However, the non-food online penetration rate decreased to 38.3 per cent this August from 42.0 per cent in the same month last year.
“While the online sales growth has begun to slow, it is still high when compared with pre-pandemic growth rates. This demonstrates how the pandemic has shifted the digital-physical shopping balance and increased the linkage between the two channels,” British Retail Consortium chief executive, Helen Dickinson OBE, said.
Retail bosses have been calling on ministers to slash business rates as the sector faces a rocky road to recovery including supply chain disruption.
“With the retail recovery showing signs of slowing, the sector is expected to grow at a more muted rate as retailers face increasing challenges on a number of fronts. Inflation is expected to accelerate putting pressure on household spending, whilst retailers battle for share of wallet as consumers spend money on leisure, entertainment and travel,” Don Williams, retail partner at KPMG, said.