Retail sales rise in August with health and beauty spending up
Retail sales were up 3.1% in August, driven by good weather and an interest rate cut to round off a "solid" summer, as a rise in discretionary spending also boosted health and beauty stores.
The year-on-year uptick for total sales across the UK was up on last August’s 1% and the 12-month average of 2%, according to the British Retail Consortium (BRC)-KPMG Retail Sales Monitor.
Non-food sales lifted 1.8% against a decline of 1.4% a year ago, while food sales increased 4.7% year-on-year, against last August’s growth of 3.9% and above the 12-month average growth of 3.3%.
BRC Chief Executive Helen Dickinson said: "Sunny weather and an interest rate cut helped August round off a solid summer of sales.
"Despite a better summer, retailers approach the ‘golden quarter’ with caution. With the later-than-expected Budget falling just days before Black Friday, many are uneasy about how consumer confidence and spending could be impacted by tax rise speculation in the run-up to Christmas."
Meanwhile, separate figures from Barclays suggest consumer card spending grew just 0.5% year-on-year in August, down from 1.4% in July.
Essential spending fell, but discretionary spending rose 2% as health and beauty stores, clothing and furniture performed well, according to the figures.
However, following the announcement of higher-than-expected inflation in July, 89% of UK consumers are now concerned about food price rises – a seven month high – and 91% say they have noticed items becoming more expensive this year.
Jack Meaning, Chief UK Economist at Barclays, said: "It is great to see consumer confidence improve in August, and households feel the benefit of another Bank of England rate cut.
"However, the outlook for the rest of the year remains subdued, particularly as Budget speculation is likely to add to uncertainty for both households and businesses.
"In our view, it will take further interest rate cuts to provide the economy with a sustained boost."
Main image credit: Boots UK
