Retail sales fall 0.9% in August, ONS reveals

Retail sales volumes fell by 0.9% in August 2021, marking the second consecutive month-on-month decline, according to the latest Office of National Statistics (ONS) data.

Despite the drop in sales, the results still remained 4.6% higher than their pre-pandemic February 2020 levels.

Online sales rose to 27.7% in August from 27.1% in July, which was “substantially higher” than the 19.7% in February 2020 before the pandemic.

Meanwhile, food store sales volumes fell by 1.2% during the period, with some evidence to suggest that the further easing of hospitality restrictions had an impact on sales, with people increasing their social spending such as eating and drinking at restaurants and bars.

However, with supply problems reaching their peak during the period, across businesses in the retail industry, 6.5% reported they were not able to get the materials, goods or services needed from within the UK in the last two weeks.

Commenting, Thomas Pugh, economist at RSM UK, said: “At face value, the 0.9% m/m fall in retail sales volumes in August does not bode well for GDP growth last month. However, there is some evidence that the 1.2% m/m drop in food sales was driven by the further easing of restrictions on the hospitality sector causing people to eat out more.

“We’re expecting GDP growth of about 0.5% m/m in August, that may sound like a relatively small rise by recent standards, but it would be enough to keep GDP on track to return to its pre-pandemic level before the end of the year.”