UK retail sales increase by 4.7% in August

UK retail sales in August have increased by 4.7% on a like-for-like basis from August 2019, according to figures released in BRC-KPMG’s Retail Sales Monitor report for the month.

Overall sales increased by 3.9% in the period, in comparison to a decline of 0.4% in August 2019.

This is above the three-month average growth of 3.5% and the 12-month average decline of 1.6%, marking the best growth since May 2018.

Food sales increased by 5.9% on a total basis for the month, which is higher than the 12-month total average growth of 3.4%.

However, in-store sales of non-food items declined by 17.8% over the three months to August, with the like-for-like basis remaining in decline for the month.

Competition from online business continues to plague the high street, with online non-food sales increasing by 42.4% in August.

Helen Dickinson OBE, the British Retail Consortium’s chief executive, said: ‘‘Despite another month of growth in August, retail sales remain down overall since the start of the pandemic. Remote working has continued to help sales in home goods, such as food, computing, furniture and TVs. 

‘’Lockdown also appears to have permanently changed some consumers’ shopping habits, with online sales continuing to boom despite shops reopening in June. Meanwhile, city centre retailers continue to be devastated by low footfall and poor sales, as office workers stayed away for yet another month.’’

She added: “Many retailers are continuing to struggle, particularly those in clothing, footwear and beauty, that are reliant on high footfall locations. With rents accumulating, and the September quarter payment date fast approaching, many retailers are hanging on by a thread. 

‘‘Unless businesses and the government can successfully persuade office workers back into city and town centres, some high street retailers will be unable to afford their fixed costs. Government will need to act fast or September will see more shops close and more job losses realised.’’

Paul Martin, KPMG’S head of retail, said: ‘‘The retail sector continued to show promising signs of recovery in August, with like-for-like retail sales up 4.7% compared to last year. Whilst welcome news, the coming months are far from problem free, with economic uncertainties – including the unwinding of the furlough scheme – likely to leave many consumers thinking carefully about their spending priorities.

‘’Clearly retailers have some serious thinking to do around what the future of the industry is going to be exactly. While the overall online penetration rate has declined in recent months, the significant acceleration of the channel is here to stay.”