August retail sales increase driven by groceries

Like-for-like retail sales improved 0.2% year on year in the four weeks to August 25, according to the latest BRC-KPMG Retail Sales Monitor. Total sales registered a 1.3% uptick.

However, there was a stark contrast in the performance of food and non-food categories.

Over the three months to August, in-store sales of non-food items dropped 3.5% in like-for-like terms and 2.1% on a total basis.

BRC-KPMG did not provide a specific figure for grocery growth during the three-month period, but said it was driven by inflation and the hot weather.

Online sales of non-food products jumped 7.5% in August, although that was below the three-month average of 7.9%.

British Retail Consortium chief executive Helen Dickinson said: “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.”

KPMG UK retail partner Don Williams added: “Overall retail spending held up in August, but only just. While any growth is welcome in the current environment, structural changes within the industry continue and there is clearly diverging performance across categories and retail business models.

“Retailers really need to drive their repositioning, restructuring and transformation programmes with ever-increasing energy and urgency.

“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.”