it is the biggest decline retail sales this year chills all over High Street Today, buyers tightened their belts much more than expected.
Sales fell 1.6% in August – analysts warned of a “winter of discontent” for the retail sector – and well beat City expectations for a 0.5% drop. Even in nominal terms, they decreased by 1.7%.
It was the biggest monthly drop since then Last July, when all Covid restrictions on hospitality were lifted, consumers rushed from shops to pubs and restaurants.
All major retail sectors—food, non-food, online and fuel—were down for the month. The only sector to see an increase in sales was newsagents and off-licence shops, including tobacco and liquor shops, which were up 6.3%.
The share of online retail sales fell to 25.7% from 26.3% in July 2022, but is still well above the pre-coronavirus level of just under 20%.
Figures from the Office for National Statistics today showed that sales fell by 5.4% last year, although in value terms they rose 5.4%, underscoring how the cost-of-living crisis has forced consumers to pay more to buy less.
Weak retail trade makes the dilemma for the Bank of England even more acute ahead of next week’s postponed meeting of the Monetary Policy Committee.
That could mean a 0.75% rise is not on the cards, despite inflation nearing 10% and sterling at a 37-year low.
Linda Peterick, UK and Ireland head of retail at consultancy Accenture, said: “The gloomy atmosphere in in the UK this week and news of sluggish economic growth will add to the sense of concern among retailers as the weather turns colder.
“Cost growth remains on the back burner and brands will be doing everything they can to minimize costs and protect their margins in the coming months.
“To avoid the winter of dissatisfaction and beyond, technology will be critical in helping retailers strike a careful balance between product, value and experience to keep customers coming back for more.”
Rosalind Hunter, partner at consultancy Simon-Kucher & Partners, said: “Figures released this morning show a fall in both cost and volume for the first time this year, suggesting consumers are voting with their feet and switching to cheaper alternatives to keep household finances afloat.”
The Government’s High Streets Task Force expert and founder of ShopAppy, Jackie Mulligan, said: “People are simply not spending money in a cost of living crisis. They tighten their belts, and then.”