The British Retail Consortium (BRC) reported that total U.K. retail sales increased by 4.1 percent in fiscal August, against growth of 1.0 percent in August 2022, coming in above the 3-month average growth of 3.6 percent and in line with the 12-month average growth of 4.1 percent.

The BRC reported data for the four-week fiscal August period ended August 26.

“Retail sales in August improved, particularly on July’s poor performance. Sale of non-food products had their best month since February, particularly for health and beauty products as retailers continued to invest in new, exciting brands, and customers splurged on self-care,” said Helen Dickinson OBE, chief executive at the BRC. “The sales figures reflected the improvement in consumer confidence in August, and retailers hope this general upward trend will carry on. Not all areas benefitted; 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.”

Sales figures are not adjusted for inflation, given that the August SPI (BRC) and July CPI (ONS) show inflation running at higher than normal levels. The rise in sales masked a likely drop in volumes once inflation is accounted for in the reporting. 

“Easing inflation will certainly be welcomed by consumers, but as the rate of price rises falls, so will the extra spending consumers need. As a result, sales growth may fall in the coming months, even if volume growth does not,” Dickinson continued. “Furthermore, high interest rates and high winter energy bills will pressure many households to spend cautiously. Retailers are combatting this through a clear focus on great value for consumers, expanding budget ranges and finding ways to cut costs where possible.”

  • Non-food sales decreased 0.2 percent on a total basis for the three-month period through August, below the 12-month average growth of 0.9 percent. For the month of August, Non-Food was thin growth year-on-year.
  • For the three months through August, in-store non-food sales increased 1.3 percent on a total basis since August 2022; this is below the 12-month average growth of 3.6 percent.
  • Online non-food sales decreased by 1.7 percent in August, against a decline of 6.1 percent in August 2022; this was shallower than the 3-month and 12-month declines of 3.1 percent.
  • The proportion of non-food items bought online (penetration rate) decreased to 34.1 percent in August from 34.7 percent in August 2022.

Internet retailers continue struggling as online sales fell again in August, dropping by 3 percent year-over-year.

“As summer comes to an end, retailers will have their sights firmly set on the most crucial period of trading as consumers get ready for Christmas,” said Paul Martin, U.K. head of retail at KPMG. “Inflation levels are heading in the right direction, albeit much more slowly than hoped, and savvy shoppers will be Christmas bargain hunting much earlier this year, as the price continues to drive decisions and consumers seek out good deals to stretch their budgets. With shoppers becoming more calculated and aware of what they are getting for their money than we have seen for a long time, retailers will have to fight harder for every sale.”

Photo courtesy Harrods