Awful August for UK retailers as uncertainty rules

UK retail sales flatlined in August as the 12-month average dropped to a new low of just 0.4%, according to research from the BRC and KPMG. Even the usually buoyant e-commerce space struggled, with online sales of non-food products up 2.2% last month, against a growth of 7.5% in August 2018.

“Greater economic and political uncertainty has driven down consumer demand. While the summer weather gave a small boost to food sales, this was cancelled out by a drop in non-food sales,” says Helen Dickinson, Chief Executive at British Retail Consortium.

“Summer discounting and poor footfall have hit in-store sales particularly hard. If the government wants to avoid seeing further store closures and job losses on the UK High Street, they must take action. Last month, 50 retail CEOs wrote to the Chancellor demanding he fix the broken business rates system, allowing businesses to fund vital investment during this unprecedented period of transformation.”

“It’s clear that for much of the retail market, efforts are being focussed on preservation, not growth, in this adverse and uncertain climate. The rhythm of the back to school promotions did provide some reprieve, bolstering sales of children’s fashion and footwear,” adds Paul Martin, UK Head of Retail at KPMG.

“This also appeared to benefit fashion sales more broadly. As has been the case for some time now, online sales outperformed the High Street, but with growth as low as 2.2%, it’s clear that even this channel has slowed down drastically. With a budgetary Spending Review, the Brexit crunch point looming and potentially a general election on the cards, it’s clear that the only thing that is certain in the coming months is further uncertainty. It’s vital that retailers insulate themselves for every eventuality and have rigorous contingency plans in place.”