Retail sales growth slows in August but clothing sales strong

Retail sales increased by 3% in August on a total basis, against a growth of 3.9% in the same month in 2020.

That’s below the three-month average growth of 6.9% and 12-month average growth of 10.3%, according to the latest data from the BRC-KPMG Retail Sales Monitor.

However, retailers reported a strong performance in clothing, with increasing demand for formalwear, driven by the return to office working and social events.

Covering the four weeks from 1-28 August 2021, on a two-year basis, total retail sales grew 8.9% compared with the same month in pre-pandemic 2019.

UK retail sales increased 1.5% on a like-for-like basis from August 2020, when they had increased 4.7% from the preceding year. That’s below the three-month average growth of 4.5% the 12-month average growth of 10.9%.

Over the three-months to August, non-food retail sales increased 10.3% on a total basis and 6.8% on a like-for-like basis. That’s below the 12-month total average growth of 14.4%.

The non-food online penetration rate decreased to 38.3% in August, from 42% in the same month last year. While down on last year, it was still up 9.3% on the 29% seen at the same point in 2019.

British Retail Consortium CEO Helen Dickinson 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 wedding season in full swing and workers gradually returning to the office, formalwear was a strong performer.

“Additionally, the bank holiday weekend and back-to-school buzz contributed to a rise in non-food sales. While the online sales growth has begun to slow, it is still high when compared with pre-pandemic growth rates. This demonstrates how the pandemic has shifted the digital-physical shopping balance and increased the linkage between the two channels.

“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.”