Modest rise in August retail sales
Published: 07 September, 2010
UK retail sales values were up 1.0 per cent on a like-for-like basis from August 2009, when sales had fallen 0.1 per cent. On a total basis, sales were up 2.8 per cent against a 2.2 per cent increase in August 2009
Food sales growth slowed a little in August 2010. Clothing and footwear sales strengthened, helped by new autumn/winter ranges and back-to-school. Homewares edged up but sales were still often deal-driven, with big-ticket items affected by consumer uncertainty over job cuts and income prospects
Non-food non-store sales (internet, mail-order and phone sales) picked up in August and were 17.8 per cent higher than a year ago, but this was against an exceptionally weak 8 per cent gain in August 2009.
“These results are a slight improvement on last month but this better growth is compared with a very poor performance a year ago and sales were often deal-driven.
“The good news is sales are still growing but anxiety about job cuts and tax rises is putting people off making major spending commitments. Renewed weakness in the housing market particularly affected the furniture and flooring sector.
“But back-to-school wear and the onset of autumn helped clothing and shoes produce a small overall improvement in non-food sales.
“With the Government about to detail its cuts and a VAT rise in prospect, retailers will be hoping consumer confidence doesn’t slip over the next few months.”
Helen Dickinson, Head of Retail, KPMG, said: "August 2009 was the worst month of the second half of last year so this year’s results are nothing to write home about. Overall sales performance deteriorated marginally as the month progressed, driven by a slowing in food, but all other sectors continued to show high levels of volatility.
“Despite the recent improvement in consumer confidence, my view is that people remain worried about how they will personally be affected by the fiscal tightening measures. The impact on spending will become more apparent as we move into the higher volume autumn months."
Jonathan De Mello, Head of UK Retail Consultancy at CB Richard Ellis, said: "August's 2.8 per cent rise in UK retail sales was promising [compared to this time last year] following strong growth in July. The great weather the UK has seen over the last two months has encouraged people out onto the high street, coupled with retailers engaging in tactical sale periods to entice shoppers into stores and reduce excess summer stock in preparation for Autumn.
"There has definitely been a sea change in how people shop, moving to a new pattern of shopping less frequently, saving up, then spending a lot more money than they would have in the past when they do actually shop. These changes in buying behaviour have seen shoppers spending more time and money in major retail hubs like London's West End, Manchester, and Glasgow, or major shopping centres like Bluewater, Meadowhall and Westfield London, often to the detriment of smaller towns and 'secondary' locations.
“This change has benefited the larger shopping centres, with fashion sales increasing by high double digit figures in one such mall vs this time last year. Some secondary centres have experienced an increased flight to value - with pound shops, charity shops, pawnbrokers and discount supermarkets increasingly dominant - and unfortunately also rises in vacancy rates."
