August UK sales ‘incredibly disappointing’

Retail

August UK sales ‘incredibly disappointing’

UK retail sales flatlined in August with the 12-month average dropping to a new low, according to the latest BRC-KPMG sales figures.

On a total basis, sales were flat last month against an increase of 1.3 percent in August last year. That was above the 3-month average of -0.4 percent but below the 12-month average of 0.4 percent, making it the lowest 12-month average on record.

Retail sales decreased by 0.5 percent on a like-for-like basis from August 2018, when they had increased 0.2 percent from the previous year. That’s above the 3-month average of -0.7 percent but below the 12-month average of -0.2 percent.

Online sales of non-food products, however, grew 2.2 percent in August, against a growth of 7.5 percent in August 2018. The 3-month and 12-month average growths were 3.4 percent and 4.3 percent, respectively.

Commenting on the figures in a statement, Paul Martin, UK Head of Retail at KPMG, said: “August proved to be yet another incredibly disappointing month for retail, with like-for-like sales down 0.5 percent and total sales flat-lining at zero. It’s clear that for much of the retail market, efforts are being focussed on preservation, not growth, in this adverse and uncertain climate.

“The rhythm of the back-to-school promotions did provide some reprieve, bolstering sales of children’s fashion and footwear. This also appeared to benefit fashion sales more broadly. As has been the case for some time now, online sales outperformed the high street, but with growth as low as 2.2 percent, it’s clear that even this channel has slowed down drastically.

“With a budgetary Spending Review, the Brexit crunch point looming and potentially a general election on the cards, it’s clear that the only thing that is certain in the coming months is further uncertainty. It’s vital that retailers insulate themselves for every eventuality and have rigorous contingency plans in place.”

Helen Dickinson OBE, chief executive at British Retail Consortium, added: “Retail sales flatlined in August with the 12-month average dropping to a new low of just 0.4 percent. Greater economic and political uncertainty has driven down consumer demand. While the summer weather gave a small boost to food sales, this was cancelled out by a drop in non-food sales.

“Summer discounting and poor footfall have hit in-store sales particularly hard. If the Government wants to avoid seeing further store closures and job losses on the UK high street, they must take action. Last month, fifty retail CEOs wrote to the Chancellor demanding he fix the broken business rates system, allowing businesses to fund vital investment during this unprecedented period of transformation.”

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