Retail sales rose in the UK in August, both in volume and value, according to the latest figures released by the Office for National Statistics this morning. Volume was up 1% on the July 2017 comparable and 2.4% on August 2016. The ONS says that this is the 52nd month in succession the figure has risen.
The rise in value year-on-year was 5.6%, indicating that prices have risen significantly over that period. In August 2017, average store prices increased across all store types compared with August 2016. Non-food stores and non-store retailing recorded their highest year-on-year price growth since March 1992, at 3.2% and 3.3% respectively.
Rising prices in clothing stores and petrol stations provided the main contribution to store price inflation. Average prices in petrol stations increased by 5.0%. In textile, clothing and footwear stores prices went up by 4.2%. The ONS says this is consistent with the Consumer Prices Index (CPI).
Buying continues despite price rises
The ONS notes that despite the price increases in clothing stores, which it thinks is likely to be as a result of sales promotions ending, consumers continued to buy more from these stores. It adds that feedback from businesses suggests that footwear stores fared well with back-to-school items in August.
Non-food stores and non-store retailing were the primary drivers of overall growth for both value and volume sales in August. The quantity bought within food stores remained flat on the month. Petrol stations showed increases in both the amount spent and quantity bought, at 0.2% and 0.1% respectively.
The ONS figures show that in August 2017
- Average weekly spending online was £1.1bn, an increase of 15.6% compared with August 2016
- The amount spent (value) online accounted for 16.4% of all retail spending, excluding automotive fuel, compared with 15.0% in August 2016
ONS senior statistician Kate Davies said: “We are seeing strong price increases across all store types compared with a year ago, reflecting wider inflationary pressures. However, we are still seeing underlying growth in sales volumes, and with strong growth in non-essential purchases as consumers continued to buy more from non-food stores.”
A view less bullish
Alex Marsh, managing director of Close Brothers Retail Finance, takes a less bullish view. While overall retail spending was up, August saw a lull in big ticket spending driven by people going on summer holidays and spending on experiences over items, he commented.
Retail spending peaked at the start of the month, and then again just before the late August Bank Holiday as people hit the shops before going away. He says this brief spike in spending was a welcome boost to high street retailers.
It remains a challenge, however, for retailers to get shoppers through the door and onto their websites, he adds. Retailers now need to be aware of the effects of prolonged inflation and consider the impact if credit cards become less freely available and shoppers have less spending power.