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High Street

Strong retail sales growth in August helps strengthen British pound

Retail sales growth of 0.3% across all sectors in August, excluding food, clothing and petrol, saw the value of the British pound increase 0.7% against the dollar at $1.32.

According to figures from the Office of National Statistics (ONS), the lower month-on-month growth rate in the quantity bought in food and clothing stores was offset by strong growth in other non-food stores at 2.8% and household goods stores at 4.5%.

The three months to August 2018 saw an overall increase in quantity bought at 3.4%, with food and household goods stores performing well in the warm weather when compared with the previous summer, while non-store retailing continued to show strong growth.

Spending online continued to increase and reached a new record proportion of all retailing at 18.2%, with strong growth in department stores also reaching a record proportion at 18.4%.

Rhian Murphy, senior statistician for the ONS, said: “Retail sales remained strong in the three months to August, with continued growth across all sectors. Food and household goods stores particularly benefited from the warm weather when compared with last summer.

“The figures for the month of August were a little more mixed, with food sales falling after strong sales earlier in the summer and clothing sales declining following a strong July, as suggested by clothing retailers. On the other hand, household goods grew strongly.”

Despite the positive growth seen in August, Richard Lim, CEO of analytics firm Retail Economics, has told Retail Sector that a lot of the “supportive factors” around retail sales over the previous two to three months have been down to “one-off events”.

He said: “There has been a lot of extraordinarily good weather, events like the World Cup and Wimbledon and the the royal wedding at the start of the year. These one-off events have really caught the imagination of the public and has also really inspired additional spending above what might have otherwise been the case.”

“Going forward we should still be very cautious of whether the latest strength of retail sales is sustainable. From our point of view household finances and confidence remains quite fragile, people are worried about Brexit, levels of savings and debt. In terms of their propensity to spend that still remains fairly weak.”

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