The UK Office for National Statistics reported on Friday that retail sales volumes rose 1.0 per cent in August 2024, following a 0.7 per cent rise in July 2024.
UK retail sales rose more than expected in August as warm weather boosted sales of food and clothing. Retail sales rose 1.1 per cent month-on-month, following a 1.0 per cent rise in July. More broadly, sales volumes rose 1.2 per cent in the three months to August 2024, compared with the three months to May 2024.
Food shop sales rose 1.8 per cent and non-food shop sales were up 0.6 per cent on the previous month. On a year-on-year basis, retail sales growth improved to 2.5 per cent from 1.5 per cent in July. This was the biggest annual increase since February 2022 and stronger than the 1.4 per cent increase expected.
After Inflation in 2022, negatively impacting consumer spending for much of the next two years, slower price growth, faster wage increases and an interest rate cut by the Bank of England have helped to restore some of the lost living standards.
A survey by market research group Gfk showed that consumer confidence in the UK fell sharply in September. The confidence indicator stood at -20, down from -13 in August.
Capital Economics economist Ashley Webb stated that today’s data release provides some tentative evidence that the retail sector will resume growth in the third quarter and contribute to broader growth in consumer spending. The Pound Sterling rose immediately after the publication.
Despite, recent reports from UK retailers have shown that discretionary spending remains under pressure. Fashion retailer Primark (ABF.L), for example, reported a fall in underlying UK sales in the latest quarter, while on Tuesday, B&Q and Screwfix owner Kingfisher (KGF.L), said demand for kitchens and bathrooms was weak.
