Retail Spending Muted as Consumers Remain Cautious

According to the latest edition of the BRC-KPMG Retail Sales Monitor, which covers the period of August 2nd to 29th, released today:

• UK retail sales values fell 0.1% on a like-for-like basis from August 2008.
• Total sales rose 2.2% in August compared to a year ago, lower than the 3.6% and 3.2% year-on-year sales increases recorded in July and June respectively. However, it was still higher than the 1.4% gain recorded in August 2008.
• The three-month weighted average of food sales rose 3.8% on a like-for-like basis and 5.3% on a total basis, compared to the same period 2008.
• The three-month weighted average of non-food sales contracted 0.7% on a like-for-like basis but grew 1.4% on a total basis, compared to the same period 2008.
• Clothing and footwear continued to weaken. Homewares and furniture sales fell back below year-earlier levels after July’s weather- and clearance-driven growth.
• Non-food non-store sales, which is internet, mail-order and phone sales, were 7.9% higher in August compared to a year ago, the weakest since May. Though it should be noted that, estimates based on ONS figures, suggest non-food non-store account for less than 4% of total UK retail sales.

Commenting on the figures Stephen Robertson, Director General of the British Retail Consortium, said:

“The stronger figures of June and July haven’t been sustained. It’s clear the deceptively good sales growth of those months was due to summer sun and price cuts – not any major revival in how customers are feeling. What spending we now have is all about value and essentials.

“Most people are still very reluctant to spend on expensive household items – unless they’re sufficiently discounted. As we head into autumn, we mustn’t make too much of any positive sales growth because the comparison will be with very weak figures a year ago when total sales growth dipped below zero”.

Data: British Retail Consortium [PDF].

Note: The BRC-KPMG Retail Sales Monitor measures changes in the actual value (including VAT) of retail sales from a sample of retailers. The Monitor measures the value of spending and doesn’t adjust for price changes. In the case of price inflation, sales volumes will increase by less than sales values. During periods of price deflation, sales volumes will increase by more than sales values.

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1. Consumers Return With a Vengeance in December, Concerns Still Linger
2. Retail Sales Rise as Consumer Confidence Trickles Back
3. London Retail Sales Rise, Confidence Still Fragile
4. Retail Sales Mixed Bag: Essentials Up, Discretionary Down
5. Food Price Inflation Seen Bottoming as Non-Food Deflation Contracts
6. August Price Inflation: One Down and Two Ups