UK retail sales enjoyed a solid performance in August, with volumes rising 1%, beating economists' forecasts, according to the Office for National Statistics (ONS).
The latest figures indicate a continued recovery, following a 0.7% rise in July, and lift year-on-year sales by 2.5%. This exceeds the City consensus of a 1.4% rise.
August gains were boosted by favourable weather conditions, which boosted demand for clothing and supermarket shopping. Textile, clothing and footwear stores led the growth, recording a 2.9% rise in sales, while food retailers also saw a notable 1.8% increase.
ONS chief economist Grant Fitzner said: “Retail sales rose in August as warmer weather and end-of-season promotions helped boost sales, particularly in clothing and food stores. Supermarkets in particular contributed to the biggest annual rise in food sales since summer 2021.
“Overall retail sales also increased in the quarter and the annual period, following strong growth in online retailers. However, overall sales remain slightly below their previous levels.pandemic level.”
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Grocery store sales volume increased by 1.8% in August 2024, following an increase of 0.3% in July 2024. Compared with August 2023, sales volume increased by 0.6%, the largest annual increase since July 2021.
Sales volumes of non-food stores, total department stores, apparel stores, home goods stores and other non-food stores increased by 0.6% in August 2024, with apparel stores having the largest impact.
Sales in the three months to August rose 1.2% compared with the previous quarter and 1.0% year-on-year.
Phil Monkhouse, UK country director at global financial services firm Ebury, said: “Consumers appear to be finding their footing, bolstered by the Bank of England’s first rate cut since 2020, which has eased mortgage pressures and sparked renewed confidence in the UK’s economic outlook.
“Now that summer is over, retailers will need to focus on maintaining growth as fall weather threatens footfall in the future.
“In addition to taking advantage of the back-to-school season, agile strategies to meet consumer demand and adopt hedging strategies to protect against international disruptions will help businesses meet any challenges in the coming months.”
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However, consumer confidence appears to have taken a hit ahead of next month's budget.
GfK's long-term barometer fell seven points in September to -20, bringing the survey back to levels seen at the beginning of the year.
Kris Hamer, director of Insight at the British Retail Consortium, said: “Clearly, the high cost of living Inflation is still putting pressure on consumers, meaning demand could fall further when energy bills rise again in October.
“In addition to trade difficulties, retail faces a disproportionate tax burden compared to other industries, which is holding back investment and contributing to a decline in the number of stores and jobs.”
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