Retail sales climbed in August driven by strong formalwear sales as customers returned to the office and socialising.

Retail consumer spend jumped 3% in August compared with the previous month, driven by consumers returning to work and social events, according to the latest BRC-KPMG Retail Sales Monitor. 

 

The 3% growth for the period was down compared with the 3.9% growth seen in the same month in 2020. It was also below the three-month average growth of 6.9% and the 12-month average growth of 10.3%.

UK retail sales increased 1.5% on a like-for-like basis from August 2020, during which they increased 4.7% from the preceding year. This was below the three-month average growth of 4.5% and the 12-month average growth of 10.9%.

Over the three months to August, in-store sales of non-food items grew 23.7% on a total basis – slightly above the 12-month average growth of 21.7%. On a two-year basis, stores saw a decline of 3.5% over the past three months.

Over the same three-month period, food sales increased 2.9% on a total basis and increased 1.9% on a like-for-like basis.

As customers increasingly returned to stores over the period, online non-food sales decreased by 4.6% in August against a growth of 42.4% in August 2020. This was below the three-month average decline of 3.5%.

Penetration of online sales for non-food items fell to 38.3% in August, compared with 42% for the same month in 2020. 

British Retail Consortium chief executive Helen Dickinson said: “As post-lockdown pent-up demand has softened, the growth in retail sales we have seen over the past few months slowed for August. Nonetheless, we still saw growth above pre-pandemic levels as people returned to stores in greater numbers.

“With wedding season in full swing and workers gradually returning to the office, formalwear was a strong performer. Additionally, the bank holiday weekend and back-to-school buzz contributed to a rise in non-food sales.

“While the online sales growth has begun to slow, it is still high when compared with pre-pandemic growth rates. This demonstrates how the pandemic has shifted the digital-physical shopping balance and increased the linkage between the two channels.

“With a precarious economic backdrop and retailers grappling with higher costs across the supply chain, the government needs to deliver on its promise to reduce the burden of business rates that are holding back investment in recovery from the pandemic. If not, we will see the number of shuttered stores continue to rise and more jobs lost.

“This will seriously impact communities right across the country and those already most economically deprived will be hit the hardest, putting the levelling-up agenda in jeopardy.”

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