UK retail sales growth continued to slow during August as the summer boost comes to an end, according to figures from the BRC-KPMG Retail Sales Monitor.
In August, UK retail sales increased by 0.2% on a like-for-like basis compared with the same period the previous year. On a total basis, sales increased 1.3% in August. The figures indicate a slowdown in summer sales when compared to the 0.5% increase in like-for-like sales in July and a 1.6% increase in total sales.
Over the three months to August, food sales increased 2.6% on a like-for-like basis and 3.9% on a total basis attributed to the heatwave experienced earlier in the summer boosting grocery sales.
Don Williams, UK retail partner, KPMG said that overall retail spending “held up” in August, but “structural changes within the industry” continue to create diverging performances across categories and retail business models.
He said: “Despite temperatures cooling off, the summer sunshine continued to fuel grocery sales. Elsewhere, the prospect of returning to school boosted sales of children’s clothes and computers, although stationary appeared overlooked for the time of year.
“Other non-food categories remained lacklustre but those retailers with a strong online presence once again managed to weather the storm better than their high street counterparts
“Perhaps unsurprising in a relatively mature market with increasing pressure on margins from rising costs, retailers are increasingly investigating partnerships and collaborations, with many reported in August alone. Such an avenue enables retailers to exploit one another’s strengths to form the perfect combination to win in these testing times.”
Helen Dickinson, chief executive, British Retail Consortium, added: “The trend of weak retail sales growth in 2018 showed little sign of abating as the Summer came to a close this August. The continued pressure on people’s disposable income has meant that some shoppers are increasingly less able to spend on the more discretionary non-food items such as clothing and footwear.
“It’s not only shoppers who are feeling the pinch. Retailers are under significant pressure with rising costs contributing to a difficult trading environment. The disproportionate burden of business rates is not helping matters. The Government must show more urgency of action and freeze rates for a two-year period to allow for a comprehensive reform of the system in order to avoid further yet more store closures and job losses.”