Retail sales in the UK hit a two-year high in August, as shoppers spent more on food, summer clothing, and seasonal discounts, providing a boost to the high street.
Annual retail sales volumes jumped by 2.5 per cent, exceeding forecasts of a 1.5 per cent rise, according to the Office for National Statistics (ONS). This marks the strongest performance since July 2022 and an acceleration from July’s 1.4 per cent annual growth. On a month-to-month basis, sales increased by 1 per cent, with July’s figure also revised upwards to 0.7 per cent.
The ONS reported that consumers spent significantly more on food, clothing, footwear, and household items, with end-of-season sales driving the uptick. Supermarkets, in particular, enjoyed a strong performance, contributing to the largest annual rise in food sales since summer 2021.
Grant Fitzner, chief economist at the ONS, noted, “Supermarkets saw their best month since July 2021, with food sales rising as inflation continues to ease. However, total retail sales remain just below pre-pandemic levels.”
Food spending increased by 1.6 per cent year-on-year, bolstered by a further decline in food price inflation to 1.2 per cent. Consumer confidence is expected to grow in the coming months, as lower inflation and falling interest rates offer relief to household budgets. The Bank of England recently held its base rate at 5 per cent but is anticipated to lower rates before the end of the year.
While overall household spending has yet to fully recover to pre-pandemic levels, the outlook for retailers is improving. Erin Brookes, managing director at Alvarez & Marsal, commented, “With cooler weather approaching, retailers are optimistic that spending on autumn and winter apparel will rise in the coming months.”
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Retail sales surge to two-year high as British shoppers snap up summer deals