UK households started to tighten the purse strings last month, bringing an end to the short-lived, heat-fuelled spending spree on UK High Streets.
Total retail sales growth slowed from 1.6 per cent in July to 1.3 per cent in August, according to the British Retail Consortium-KPMG sales monitor, despite ongoing strong grocery sales and some back-to-school spending.
On a like-for-like basis, retail sales nudged up 0.2 per cent year-on-year. This compares to a rise of 0.5 per cent in July, when buoyant spending on food and drink delivered a fillip to a beleaguered sector.
Back-to-school spending helped mitigate a tightening of the purse strings elsewhere
While shoppers seemed happy to spend on children’s clothing and laptops, they held back on stationery this year, as well as clothing and footwear for themselves.
‘Overall retail spending held up in August, but only just,’ said Don Williams, retail partner at KPMG.
‘Whilst any growth is welcome in the current environment, structural changes within the industry continue and there is clearly diverging performance across categories and retail business models.
‘Despite temperatures cooling off, the summer sunshine continued to fuel grocery sales. Elsewhere, the prospect of returning to school boosted sales of children’s clothes and computers, although stationary appeared overlooked for the time of year.’
The BRC pointed out that August’s strong food sales were also spurred by inflation, which has soared since the Brexit-induced collapse in the value of the pound.
Online sales of non-food products grew 7.5 per cent in August, falling below the three-month average of 7.9 per cent and in line with the 12-month average of 7.6%.
BRC-KPMG figures suggest that spending on clothing and shoes slowed in August
Meanwhile, a separate survey by Barclaycard showed that a third of consumers are planning to reduce their spending after making the most of the hot summer.
Telling a slightly different story, the Barclaycard data found that consumer spending rose 4.5 per cent year-on-year in August.
Essential spending grew 6.9 per cent on the back of price rises in petrol and at supermarkets.
‘Brits have been feeling confident enough in their spending power to enjoy summer events and evenings out,’ said Barclaycard director Esme Harwood.
However, she added: ‘Looking ahead, it appears that many consumers are planning to tighten their belts and keep a closer eye on their finances after spending more than usual over summer.’