Retail sale volumes in the UK fell by 0.9% in August 2021, the Office for National Statistics (ONS) announced on Friday, countering expectations of a rise resulting from the end of most lockdown restrictions. The decline was slower than the 2.8% fall recorded in July, however.
The figures for the three months to August showed a 0.3% increase in retail volumes compared to the previous three-month period, and a rise of 4.6% compared to the pre-pandemic level recorded in February 2020.
Economists polled by Reuters had predicted a rise of 0.5% in August.
Food store sales fell by 1.2%, which the ONS linked to the easing of hospitality restrictions, with data from Open Table showing a pickup in online restaurant reservations in August.
Non-food store sales fell by 1%, driven by falls in department store sales, which were down 3.7%. Automotive fuel sales rose by 1.5%, reflecting increased travel, but were still 1.2% below February 2020.
Meanwhile, the great pivot to online shopping continued, with the proportion of retail sales made online rising to 27.7% in August from 27.1% in July, and up from the 19.7% documented before the pandemic.
Online spending values increased by 1.5% in August compared to the previous month.
Supply chain issues
Polling in August indicated supply chain issues hit some retail businesses, with 6.5% saying they were unable to get the materials, goods or services they needed from within the UK in the last two weeks.
That was slightly lower than the 7.1% rate found across all industries, though it was particularly pronounced in department stores, where 18.2% of businesses were affected.
On Thursday, retailer John Lewis said it was partnering with other businesses to charter additional space on ships to ensure it has Christmas stock on time.
Supply issues have been caused by a combination of congestion on global shipping routes, factory closures due to COVID-19 and a shortage of lorry drivers in the UK.
The August retail figures come off the back of the ONS announcing that the UK economy grew by just 0.1% in July.
Paul Dales, chief UK economist at Capital Economics, pointed out that retail sales are now just 4.5% above their pre-pandemic peak, having been 10.1% above that level in April.
“This probably isn’t as gloomy a sign for the overall economic recovery as it may seem, as at least some of it reflects households shifting their spending to elsewhere after the lockdowns,” Dales said.
He added: “The 1.2% month-on-month fall in food sales may be because people are eating less at home and more in cafes, pubs and restaurants.”
On Thursday, it was announced that the US economy defied expectations with a rise in August retail sales, which were up 0.8% from July 2021, and up 13.1% over the same period last year.