Economic uncertainty, summer discounting and weak footfall have caused UK retail sales to flatline in August, new research shows.
The latest British Retail Consortium (BRC) and KPMG Retail Sales Monitor has revealed that total UK retail sales were flat in August compared with an increase of 1.3% during the same month in 2018. This is above the three-month average of -0.4%, but below the 12-month average of 0.4% – the lowest 12-month average on record.
On a like-for-like basis, UK retail sales decreased by 0.5% from August 2018, when they had increased 0.2% from the preceding year.
However, online sales of non-food products grew 2.2% in August, against a growth of 7.5% in 2018. The three-month and 12-month average growths were 3.4% and 4.3% respectively.
Helen Dickinson, chief executive of the BRC, said: “Retail sales flatlined in August with the 12-month average dropping to a new low of just 0.4%. Greater economic and political uncertainty has driven down consumer demand. While the summer weather gave a small boost to food sales, this was cancelled out by a drop in non-food sales.
“Summer discounting and poor footfall have hit in-store sales particularly hard. If the government wants to avoid seeing further store closures and job losses on the UK high street, they must take action.
“Last month, 50 retail CEOs wrote to the chancellor demanding he fix the broken business rates system, allowing businesses to fund vital investment during this unprecedented period of transformation.”
Paul Martin, UK head of retail at KPMG, added: “August proved to be yet another incredibly disappointing month for retail, with like-for-like sales down 0.5% and total sales flat-lining at zero. It’s clear that for much of the retail market, efforts are being focused on preservation, not growth, in this adverse and uncertain climate.
“The rhythm of the back-to-school promotions did provide some reprieve, bolstering sales of children’s fashion and footwear. This also appeared to benefit fashion sales more broadly. As has been the case for some time now, online sales outperformed the high street, but with growth as low as 2.2%, it’s clear that even this channel has slowed down drastically.
“With a budgetary spending review, the Brexit crunch point looming and potentially a general election on the cards, it’s clear that the only thing that is certain in the coming months is further uncertainty. It’s vital that retailers insulate themselves for every eventuality and have rigorous contingency plans in place.”