Sunny weather and an interest rate cut helped retailers round off a solid summer of sales in August though fear of further food inflation dampened consumer confidence, industry experts stated citing official data released today (Sept 9).
According to data released by BRC, food sales increased by 4.7 per cent year on year in August, against a growth of 3.9 per cent in August 2024. This was above the 12-month average growth of 3.3 per cent.
Non-Food sales increased by 1.8 per cent year on year in August, against a slight drop in August 2024.
Overall, total retail sales increased by 3.1 per cent year on year in August, against a growth of 1 per cent in August 2024. This was above the 12-month average growth of 2 per cent.
Speaking on the preference of food and drink sector, Sarah Bradbury, CEO, IGD, said, "As shoppers settle back into reality after the hottest summer on record, food price inflation rose sharply in line with IGD’s forecast, reaching 4.9 per cent in July, driven by staples like beef, chocolate, and coffee.
"Shopper confidence fell for the third consecutive month to -1, with many expecting food prices to climb even further. The emotional weight of rising energy bills and fears of tax hikes in the Autumn Budget are adding to the strain, especially as unemployment ticks upward.
"Yet, there are glimmers of relief- interest rates have been cut again, and mortgage rates are easing, offering some financial respite. While volumes remain under pressure, financially resilient shoppers may remain more confident, even as they brace for a challenging winter.”
Commenting on the official data, Helen Dickinson, Chief Executive of the British Retail Consortium, said, "Computing performed well as parents readied children for the new academic year, and gaming continued to show strong sales. Furniture also did better for the second month in a row, following several months of falling sales.
"New school clothing and footwear did not sell as well as expected, as some families opted for second-hand purchases. Stronger growth in food and drink was largely down to rising prices, which rose over 4 per cent in August, rather than increasing volumes.
“Despite a better summer, retailers approach the ‘golden quarter’ with caution.
"With the later-than-expected Budget falling just days before Black Friday, many are uneasy about how consumer confidence and spending could be impacted by tax rise speculation in the run-up to Christmas. Government needs to shore up both consumer and business confidence.
"An assurance that the business rates reforms will deliver a meaningful reduction for retail and hospitality would remove uncertainty, give businesses the confidence to invest in local communities and help limit the price rises which are worrying consumers.”