Tuesday 10 August 2021 6:00 am | Updated: Monday 09 August 2021 7:19 pm

Consumer fatigue slows retail sales growth

budget 2021 business rates — Retail sales jumped 9.8 per cent in July compared to the same period in 2019, before the onset of the Covid crisis

Signs of fatigue among consumers after the initial burst in spending triggered by the gradual easing of Covid restrictions are starting to emerge, according to new figures released today.

Research from the British Retail Consortium and KPMG show retail sales jumped 9.8 per cent in July compared to the same period in 2019, before the onset of the Covid crisis.

In June, the two year growth rate in total retail sales was 13.1 per cent, indicating consumers may be reining in spending after several months of capitalising on their newfound freedoms since restrictions started to ease in mid-April.

Experts had expected the so-called “Freedom Day” to boost sales, but this has largely failed to materialise.

Helen Dickinson OBE, chief executive of the BRC, said: “July continued to see strong sales, although growth has started to slow.”

“The lifting of restrictions did not bring the anticipated in-store boost, with the wet weather leaving consumers reluctant to visit shopping destinations.”

Online non-food sales rose 0.6 per cent in July, compared to a growth rate of 41 per cent in the same period last year, suggesting consumers are starting to revert to pre-Covid shopping patterns.

Experts warned that the boon surging consumer spending has provided for retailers may continue to ease over the coming months.

Paul Martin, head of retail at KPMG, said: “Over the coming months the health of the sector is expected to grow at a much slower rate as retailers face increasing challenges on a number of fronts.”

“Staffing pressures, increases in commodity and component costs, rising inflation eating into households’ spending power and stalling consumer confidence could lead to a slowdown in retail sector growth as we head into autumn.”