Retail sales rise as non-food bucks downward trend

Sales across the industry rose 1.3% on a like-for-like basis during the four weeks to August 26, compared to the same period last year.

On a total basis, sales were up 2.4% year-on-year – the strongest rate of growth since Easter – according to the BRC-KPMG Retail Sales Monitor.

Non-food sales returned to growth, increasing 0.6% on a like-for-like basis across the wider three-month period, while food like-for-likes climbed 1.8%.

Ecommerce purchases continued to outpace those made in-store, with online sales of non-food products surging 11% in August – outstripping the three-month and 12-month averages of 9.8% and 8.8% respectively.

In contrast, in-store sales dropped 1.4% on a total basis and 1.9% in like-for-like terms during the three months to August 26.

BRC chief executive Helen Dickinson hailed a “welcome pick-up” in sales during August, which she said was driven by homewares, autumn apparel and the new school term.

‘Challenges lurk’

But she warned: “These figures tell a less positive story about the health of consumer spending than it might seem at first glance.

“Non-food sales have only just recovered to levels seen two years ago, after a dismal August in 2016, while strong figures for food are largely the result of rising prices, leaving growth in volume terms weaker than last year.”

Dickinson added: “Stark challenges lurk around the corner for the retail industry.

“Purchasing decisions are very much dictated by a shrinking pool of discretionary consumer spend, with the amount of money in people’s pockets set to be dented by inflation and statutory rises in employee pension contributions in a few months’ time.”

Dickinson urged the government to secure “a strong deal on customs and tariff-free trade with the EU” to protect British consumers from further price increases.

KPMG retail partner Don Williams added: “Retailers have managed to achieve stronger than expected growth; however, adding to this could be the fact that consumers appear to be turning a blind eye to the potential crush on spending power to come.

“The industry now needs to overcome further devaluation of the pound and the increased costs therein.”