Retail sales sunk back in August in a “U-turn” of fortunes for the sector
Retail sales slowed in August, representing a "U-turn in retail fortunes" compared to figures from July.
Overall sales fell by 0.3 per cent – the biggest month-on-month decline since September 2014, according to data from the British Retail Consortium (BRC) and KPMG.
Like-for-like sales were down 0.9 per cent as compared to August last year; on a three month analysis, overall sales in the UK grew 0.6 per cent.
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“In contrast to July, August’s retail figures illustrate somewhat of a U-turn of retail fortunes," said David McCorquodale, head of retail at KPMG. "Like-for-like sales were down 0.9 per cent on this time last year – painting a disappointing picture given previous signs of encouragement."
In July, the retail monitor compiled by BRC and KPMG found total sales grew by 1.9 per cent.
Howard Archer, chief UK economist for IHS Global Insight, said: "It is notable that the fundamentals are currently still pretty healthy for consumers to keep spending despite confidence falling sharply in the aftermath of the Brexit vote – and confidence actually recovered some its losses in August."
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Helen Dickinson, chief executive of the BRC, said August's "lacklustre performance" should be taken with a pinch of salt.
"As we've seen in the last couple of months, data portending the health of the economy paint a volatile picture," Dickinson said. "The fact is that so far little has directly changed for the UK's consumers as a result of the referendum, so it's the pre-existing market dynamics that are still driving sales."
Month-on-month changes in sales could be explained by holiday timings, and summer sales, she said.
"On the whole, consumers react to their personal experience of the economy in terms of their job security, rising prices in the shops and what happens to their wages," said Richard Lim, chief executive of consultancy Retail Economic. "As of yet, not much has happened to affect spending power and so, judging by this latest data, their propensity to spend could be faltering."
"Shoppers are still coming to terms with what Brexit will mean for their personal finances and it’s this heightened uncertainty that will lead to volatility in the short-run."