Weak trend confirmed by August sales

In August, UK retail sales increased by 0.2% on a like-for-like basis from August 2017, when they had increased 1.3% from the preceding year.

On a total basis, sales increased 1.3% in August, against an increase of 2.4% in August 2017. This is below the 3-month and 12-month averages of 1.8% and 1.5% respectively.
Garden centres said August was an unremarkable month this year. Klondyke chief executive said August was "ok and not brilliant" with warm weather than colder, wetter weather making sales "a bit flat". Plant sales were not as good as they had been in the strong August 2017.
Over the three months to November 2017, In-store sales of Non-Food items declined 3.0% on a Total basis and 3.7% on a Like-for-like basis. On a 12-month basis, the total decline was 2.2%, the deepest since our records began in January 2012.
Over the three months to August, In-store sales of Non-Food items declined 2.1% on a Total basis and 3.5% on a Like-for-like basis. This is higher than the 12-month Total average decline of 2.6%.
Over the three-months to August, Non-Food retail sales in the UK decreased 1.0% on a like-for-like basis and increased 0.1% on a Total basis. This is higher than the 12-month Total average decrease of 0.4%. August Non-Food sales remained in decline.
Online sales of Non-Food products grew 7.5% in August, against a growth of 11.0% in August 2017. This is below the 3-month average of 7.9% and in line with the 12-month average of 7.6%. Online penetration rate increased from 21.4% in August 2017 to 23.2% in August 2018.
August was another month of subdued sales growth, showing a decline in non-food categories while food was driven by inflation and the hot weather. The home and large ticket item categories made a come-back towards the end of the month but the overall spend remained constrained.
British Retail Consortium chief executive Helen Dickinson said: "The trend of weak retail sales growth in 2018 showed little sign of abating as the Summer came to a close this August. The continued pressure on people’s disposable income has meant that some shoppers are increasingly less able to spend on the more discretionary non-food items such as clothing and footwear.
"And it's not only shoppers who are feeling the pinch. Retailers are under significant pressure with rising costs contributing to a difficult trading environment. The disproportionate burden of business rates is not helping matters. The Government must show more urgency of action and freeze rates for a two-year period to allow for a comprehensive reform of the system in order to avoid further yet more store closures and job losses."
KPMG UK retail partner Don Williams said: "Overall retail spending held up in August, but only just. 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.  Retailers really need to drive their repositioning, restructuring and transformation programmes with ever increasing energy and urgency.
"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.
"Other non-food categories remained lacklustre but those retailers with a strong online presence once again managed to weather the storm better than their high street counterparts.
"Perhaps unsurprising in a relatively mature market with increasing pressure on margins from rising costs, retailers are increasingly investigating partnerships and collaborations, with many reported in August alone. Such an avenue enables retailers to exploit one another’s strengths to form the perfect combination to win in these testing times."
IGD chief executive Joanne Denney-Finch said: "As the hot weather faded in August, so did the momentum behind food and grocery sales after a long run of excellent results. Time will tell whether this was just a blip or whether a squeeze on real incomes is beginning to bite.
"From our conversations with shoppers we don’t see next year’s Brexit transition influencing food shopping behaviours yet. Six in ten shoppers say they focus more on day-to-day living rather than thinking about the future."

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