On a Total basis, all retail sales increased by 3% in August (covering the four weeks 1 – 28 August 2021), against a growth of 3.9% in the same month last year. This is below the 3-month average growth of 6.9% and the 12-month average growth of 10.3%.
On a 2-year basis, Total retail sales grew 8.9% during August compared with the same month in 2019.
UK all retail sales increased 1.5% on a like-for-like basis from August 2020, when they had increased 4.7% from the preceding year. This is below the 3-month average growth of 4.5% the 12-month average growth of 10.9%.
Over the three months to August, Food sales increased 2.9% on a Total basis and increased 1.9% on a Like-for-like basis. This is below the 12-month Total average growth of 5.4%. For the month of August, Food was in growth year-on-year.
Food & Drink sector performance, Susan Barratt, CEO of IGD, said, “Food and drink sales in August were broadly flat on 2020’s performance, with some spending switching from retail back into the out-of-home sector.
'Despite sales being limited by the dull weather, they were supported by staycations and the late summer Bank Holiday, which helped sales show a small amount of growth.
“IGD’s Shopper Confidence Index remained strong, continuing to hit one of the highest levels in the last five years. However, concern around inflation continues, with IGD’s ShopperVista revealing that 79% of shoppers expect food and grocery prices to get more expensive in the year ahead, up from 75% in July ’21.
'With much of the economy now open, more shoppers are changing what they spend their money on; some 73% have spent more on products and services in August, compared to 69% in June’21 and 31% are spending more on eating and drinking out, compared to 22% in June’21.”
Helen Dickinson OBE, Chief Executive, British Retail Consortium, said, “As post-lockdown pent-up demand has softened, the growth in retail sales we have seen over the past few months slowed for August. Nonetheless, we still saw growth above pre-pandemic levels, as people returned to stores in greater numbers.
“With a precarious economic backdrop and retailers grappling with higher costs across the supply chain, the Government needs to deliver on its promise to reduce the burden of business rates that are holding back investment in recovery from the pandemic. If not, we will see the number of shuttered stores continue to rise and more jobs lost.
'This will seriously impact communities right across the country, and those already most economically deprived will be hit the hardest, putting the levelling up agenda in jeopardy.”
Don Williams, Retail Partner at KPMG, said, “Much like the summer weather retail performance in August was mixed. Sales growth on the high street continued to slow, with footfall still below pre-pandemic levels and online sales took a retreat from the highs of last year, whilst some discretionary non-food categories continued their recovery.
“Overall, the high street saw 3% growth, dented by lower food sales growth of 1.9% as consumers enjoyed a fully re-opened hospitality sector. Online sales fell back by -2.5% compared to August 2020, though online penetration rates remained significantly above pre-pandemic levels, signalling the step up in online shopping is here to stay.'
Williams continued, “With the retail recovery showing signs of slowing, the sector is expected to grow at a more muted rate as retailers face increasing challenges on a number of fronts. Inflation is expected to accelerate putting pressure on household spending, whilst retailers battle for share of wallet as consumers spend money on leisure, entertainment and travel.
'Staffing pressures remain and supply chain issues are being widely reported, with raw material shortages and challenges getting product into the UK and getting goods into customers‘ hands. This may feed into limited availability of certain products and the spectre of price rises remains.'
Williams concluded, “Retailers will be pinning their hopes on a more predictable normal with white collar workers returning to city centres in greater numbers from this month and a buoyant Christmas fuelled by some of the savings that consumers have made over the last 18 months of lockdown and restricted spending.
'Nonetheless, successful retailers will have to work very hard to ensure the right availability of the right product to satisfy the requirements of an ever more demanding customer.”
(source: IGD, image: pexels)