Retail sales in the UK saw a boost in August 2024, as warmer weather prompted shoppers to stock up on picnic and barbecue essentials, while also refreshing their wardrobes with summer clothing. This increase in spending lifted overall retail sales by 2.9% in the three months to August, up from the 2.6% recorded in July, according to figures released by the British Retail Consortium (BRC) and KPMG.
The report highlights that the surge in food purchases, particularly for outdoor gatherings, played a significant role in driving this growth. However, not all sectors benefited from this uplift. Non-food sales declined by 1.7%, maintaining the same pace as the previous month, with categories like furniture, household appliances, and other homewares continuing to suffer as households cut back on large purchases.
Food and Garden Products Drive Sales Surge
Data from Barclaycard confirmed that spending on groceries saw its fastest rise since March, with butchers and delicatessens enjoying a particular boost, thanks to the increased popularity of alfresco dining. Garden centres also reported a notable 8% rise in spending, the highest increase so far this year, as consumers sought to enhance their outdoor spaces during the warm weather.
Clothing and gardening products benefited from the summer conditions, with shoppers taking advantage of seasonal offerings. However, Barclaycard’s data offered a slightly more cautious view on fashion spending, reporting that its cardholders spent less on clothing and accessories than they did a year ago. The company noted that 53% of shoppers are actively reducing discretionary spending, with fashion being one of the main areas where they are cutting back.
Challenges Persist for Big-Ticket Items
While food and summer-related products thrived, the same cannot be said for big-ticket items such as furniture and household appliances. Spending in these areas continued to decline as households remained cautious with their budgets, especially in light of rising costs.
Linda Ellett, Head of UK Consumer, Retail, and Leisure at KPMG, noted that despite the positive impact of the sunshine, total spending still lags behind the same period last year. She warned that the challenging retail environment is likely to persist for the remainder of 2024, as concerns over energy bills and rising costs weigh heavily on consumer confidence.
Outlook for Christmas and the Future
Looking ahead to the key retail season of Christmas, the outlook appears uncertain. A survey conducted by Barclaycard revealed that more than a third of Britons expect this Christmas to be more expensive than last year, with one in five expressing concern about managing the rising costs. This sentiment could dampen spending as the festive season approaches.
Helen Dickinson, Chief Executive of the BRC, urged the Government to take action in the upcoming autumn budget to address the business rates system, which she believes is holding back retailers from making necessary investments. With the potential for consumer spending to weaken further as energy costs rise in October, many retailers are likely to wait for clarity from the Chancellor before making investment decisions.
As the UK’s retail sector navigates these challenges, fashion retailers will be hoping for continued sales growth as they clear summer stock and prepare for the autumn season.
