Retail sales rise in August driven by homewares and grocery

Total retail sales increased 3.9% year on year, compared with a 0.4% decline in August 2019, according to the BRC-KPMG retail sales monitor. This was above the three-month average growth of 3.5% and far above the 12-month decline of 1.6%.

This was the highest growth recorded since May 2018, excluding Easter distortion, indicating sales figures are heading in a positive direction.

On a like-for-like basis, sales also increased 4.7% compared with the same month last year, when they had decreased 0.8% from August 2018.

Over the three-month period to August, food sales were up 6.3% on a like-for-like basis and 5.9% on a total basis. This was also above the 12-month average of 3.4%. 

In August alone, food was in growth, but in-store sales of non-food items was in decline.

In the three months to August, in-store sales of non-food items declined 17.8% on a total basis and 8.5% on a like-for-like basis. This was marginally better than the 12-month average decline of 18.4%.

Online fared much better – online non-food sales grew by 42.4% in August, against a growth of 1.6% in August 2019.

Online non-food penetration surged to 39.3%, up from 29% in the same month last year.

British Retail Consortium chief executive Helen Dickinson said: “Despite another month of growth in August, retail sales remain down overall since the start of the pandemic. Remote working has continued to help sales in home goods, such as food, computing, furniture and TVs.

“Lockdown also appears to have permanently changed some consumers’ shopping habits, with online sales continuing to boom despite shops reopening in June.

“Meanwhile, city-centre retailers continue to be devastated by low footfall and poor sales, as office workers stayed away for yet another month.

“Many retailers are continuing to struggle, particularly those in clothing, footwear and beauty that are reliant on high-footfall locations.”

KPMG’s UK head of retail Paul Martin said: “The retail sector continued to show promising signs of recovery in August, with like-for-like retail sales up 4.7% compared with last year.

“While welcome news, the coming months are far from problem-free, with economic uncertainties – including the unwinding of the furlough scheme – likely to leave many consumers thinking carefully about their spending priorities.

“We continue to experience mixed fortunes and not all retailers are where they should be at this point in the year. Fashion sales did start to rebound somewhat – at least online – although this was mainly driven by children’s back-to-school purchases.

“Likewise, the focus on home-related products, including furniture and computing equipment, continued – no doubt aided by many consumers remaining mostly at home.

“Clearly, retailers have some serious thinking to do around what the future of the industry is going to be exactly. While the overall online penetration rate has declined in recent months, the significant acceleration of the channel is here to stay.

“With this in mind, retailers need to focus on the cost of doing business, as online is generally more expensive to operate.”