Warmer weather lifted retail sales growth in the UK last month as shoppers grabbed grub for picnics and barbecues, shows latest report released today (3).
According to the latest figures from the British Retail Consortium (BRC) and analysts at KPMG, total amount spent in shops on food rose by 2.9 per cent in the three months to the end of August, up from 2.6 per cent reported the month before.
Overall, retail sales increased by 1.0 per cent year on year in August, against a growth of 4.1 per cent in August 2023. This was above the 3-month average growth of 0.4 per cent and below the 12-month average growth of 1.2 per cent.
Commenting on the figures, Helen Dickinson OBE, Chief Executive of the British Retail Consortium, said, "Sales growth picked up in August, particularly for food as people came together to host barbecue and picnic gatherings for family and friends, and for summer clothing, health & beauty products as people prepared for trips away and summer social events. While computing did well as university students made the most of summer discounting and readied themselves for the new academic year, other back to school related sales were weaker than normal as some families opted for second hand purchases.
"Following a difficult summer for much of retail, and the possible weakening of consumer spending as energy bills rise come October, many will be waiting for the Chancellor’s Autumn Budget before finalising their investment strategies. Labour’s first budget is a golden opportunity to make good on their manifesto commitment and fix the broken business rates system which is holding back investment in people, places, technology and limiting growth. Decisive action will benefit working people across the country."
Talking about food and drink sector in particular, Sarah Bradbury, CEO, IGD, said, "With the Olympics well under way and Summer in full swing, shoppers found opportunities to enjoy more, smaller-scale occasions during August.
"Comparing the first four weeks of the month against the same period last year yields positive news for the grocery market, as both sales and volumes have seen up-tick since last year and the rate of growth has accelerated from July.
"While Shopper Confidence has remained stable for the third month in a row, the outlook for the year ahead continues with caution. As we approach October's Budget announcement, we expect to see more movement in confidence as shoppers begin to understand what the future might hold."
Linda Ellett, UK Head of Consumer, Retail & Leisure, KPMG, added that despite summer finally making an appearance, and a slight uptick in consumer confidence, shoppers did not catch-up their spending during August.
"After many tough months of falling sales, sports and travel equipment enjoyed a welcome boost during this key summer holiday period, and sales of clothing also saw a second month of growth on the high street. Food and drink sales were positive on the high street, whilst online retailers saw demand for DIY and gardening items with growth at nearly 11 per cent. Fashion retailers will be hoping sales growth continues as they look to dispose of excess summer stock as we head into the key autumn season."
Consumer sentiment is gradually starting to improve, but there still remains some nervousness around potential tax rises and the cost of putting the heating back on when the cooler weather arrives. The fragile nature of consumer confidence means shoppers will continue to be driven by price and value, moving from brand to brand to find the best price benefit and we are likely to see retailers using promotional activity to seek to win at this, Ellett added.
As green shoots of growth start to appear, those retailers looking to seize on slowly returning consumer confidence will need to demonstrate best value for money, as well as tap in to the “experience” factor as consumers focus their discretionary spend on having fun or experiences over owning more ‘stuff’. Winning retailers will need clear differentiation, targeting specific consumer needs, and executing with consistency and clarity."
Simon Hannah
