Retail sales volumes are estimated to have risen by 0.4% in August 2023, partially recovering from a fall of 1.1% in July 2023 (revised from a fall of 1.2%), the latest figures from the Office of National Statistics (ONS) reveal.
Looking broader, sales volumes rose by 0.3% in the three months to August 2023 when compared with the previous three months.
Food stores sales volumes rose by 1.2% in August 2023, following a fall of 2.6% in July 2023 when supermarkets reported that the wet weather reduced clothing sales, and supermarket food sales also fell back.
Non-food stores sales volumes grew by 0.6% in August 2023, following a fall of 1.2% in July 2023 when poor weather reduced footfall.
Non-store retailing (predominantly online retailers) sales volumes fell by 1.3% in August 2023, following a rise of 1.9% in July 2023 when wet weather and a range of promotions boosted sales.
Automotive fuel sales volumes fell by 1.2% in August 2023, with retailers suggesting the fall was linked to a sharp increase in petrol and diesel prices.
The percentage of retail sales taking place online fell from 27.4% in July 2023 to 26.9% in August 2023.
Kelly Askew, Accenture’s retail strategy & consulting lead in the UK and Ireland said: “Although the summer weather may not have improved much from July to August, the fortunes of UK retailers did. Shoppers made the most of the last Bank Holiday of the year by increasing their spending, particularly on food.
Businesses will be hoping that this optimism will continue as we head towards Christmas. Despite this week’s unexpected fall in inflation, shoppers may still be looking at cutbacks this festive season as the cost of living continues to bite.
With consumers looking to stretch their money further, retailers will have to fight harder than ever for each sale. The industry has already shown it can discover fresh and inventive ways to reflect changing habits. This year, championing value at the heart of their strategy will ensure that businesses can maximise profits.”
Oliver Vernon-Harcourt, head of retail at Deloitte, said: “Retail sales in August rebounded following a disappointing July, as falling inflation and an uplift in consumer confidence boosted spending.
“The macroeconomic situation continues to improve and consumers are more optimistic. However, the high price of essentials due to persistent food inflation remains a heavy weight on consumer spending.
“Looking ahead, retailers will need to prioritise having good availability and effective promotions to maintain consistent sales growth. For consumer businesses leaders, it will be a balancing act between sticky inflation, peaking interest rates and a tight labour market, so caution is needed.”
Silvia Rindone, EY UK&I retail lead comments: “As the UK experienced rising temperatures towards the end of August, consumer confidence also rose as the warm weather and slowing inflation aided retail sales.
“Sales volumes rose marginally by 0.4% in August, recovering slightly after a fall of 1.2% in July due to wet weather – marking an overall rise of 0.3% in the three months to August.
“Food stores saw an uplift in sales volumes as shoppers made the most of the good weather, with volumes rising by 1.2% in August – following a fall of 2.6% in July.
“While a positive month for in-store retail sales and volumes, online sales have continued to plateau for some time, falling by 0.9% from July to August after a strong month in July due to seasonal promotions. As we enter autumn, we could see online figures improve as consumers decide not to brave the cold weather and do their shopping from the comfort of their own homes.
“Retailers remain cautious as we prepare to enter the ‘golden quarter’, with various retail events, such as Halloween, Black Friday and Cyber Monday on the horizon. With disappointing sales figures reported for last year’s Black Friday, retailers still have time to assess and adapt their offerings to capitalise on the opportunity for 2023. Shoppers will be keen for a bargain as pressures from the rising cost of living has meant spending on discretionary goods has been limited over the past 12 months.
“With summer wardrobes packed away for another year, chillier temperatures mean that shoppers may be enticed to buy new autumn and winter ranges. This will be critical as over the last few years we have seen mid-season mark downs starting earlier due to excess stock. Retailers will need to monitor this carefully if they are to avoid inventory issues and working capital constraints.
“According to the EY ITEM Club, the UK may avoid a recession, but the economy will remain stagnant. Consumers will continue to be impacted by the cost of living, particularly during the colder months with increased energy bills, however the UK public has proven itself to be resilient as spending continues – a positive sign for the future.”
Adam Bullock, UK director at TopCashback said: “Today’s rise in retail sales reflects the busy end to the summer holidays as consumers spent more on food and clothes.
“Our internal data shows that fashion related purchases increased by 4% in August, with shoppers spending more money preparing for the back-to-school season and cosier autumn months.
“Alongside this, research from our new report, How Britain Spends, revealed that spending on groceries rocketed by 41% over the summer, while toiletries climbed by 24%. We also found people were spending 19% more on average on pet care and food.
“As the cost-of-living crisis isn’t showing any signs of disappearing just yet, shoppers need to prioritise savvy spending. It’s really important to try and plan ahead and make small savings where you can, whether that’s by shopping around, making the most of loyalty schemes and voucher codes or earning money back through cashback.”
TopCashback’s new research, ‘How Britain Spends’, reveals the latest retail trends and spending habits:
- Almost half (48%) of adults’ overall spending has increased in the last three months compared to those before
Biggest increase in UK spending in the last three months:
- Essential groceries – up by 41%
- Essential toiletries – up by 24%
- Petrol – up by 23%
- Pet care and pet food – up by 19%
- Essential clothing – up by 16%
Biggest increases in UK seasonal and luxury spending in the last three months:
- Treat groceries – up by 21%
- Takeaways – up by 18%
- Dinner out – up by 17%
When it comes to transport, Brits have spent an average of:
- £89 over the last three months on train tickets and another £87 on public transport
- The amount spent on public transport increases to £101 for those living in Inverness, £98 for those in Liverpool, and £97 in Norwich
