Wednesday, January 19, 2022

August sales growth worst this year

August saw the worst sales growth this year despite high expectations of an increase during the Olympic Games, figures released today show.

UK retail sales values fell 0.4 per cent on a like-for-like basis, compared to the same month last year, according to the British Retail Consortium (BRC)-KPMG Retail Sales Monitor.

While total sales saw an increase of 1.6 per cent, against a rise of 1.5 per cent in August 2011, this nonetheless represented the lowest growth since November last year considering the anomalous timing of Easter this year.

Director General of the BRC Stephen Robertson said: “There‘s no evidence here of any Olympic boost to retail sales overall.

“Sadly, apart from April – distorted by Easter timings – August saw the worst sales growth this year.

“Hot weather and the Olympics did help sales of party food and drink but that was more than offset by a really weak performance for non-food goods.”

The anticipated feel-good factor failed to encourage consumers to spend on the high street though also impacted online sales, which suffered the lowest growth since October 2008 recording a rise of just 4.8 per cent over the period as the public watched sport on tablets and mobile rather than shop.

Helen Dickinson, Head of Retail at KPMG, who was last week confirmed as the incoming Director-General of the BRC following Robertson‘s departure at the end of the year, said that areas of discretionary spending such as womenswear, furniture and homewares were hardest hit over the month.

Dickinson added: “Retailers‘ hopes that the Olympics would inspire a pickup in spending were dashed as shoppers stayed away from the high street and enjoyed the sporting spectacle from their armchairs.

“While, without doubt, the Olympics brought a much needed boost to consumer confidence, the country was ‘otherwise engaged‘ in August and the sales figures show a mixed picture.”

Although August is typically a weaker month for retail, Neil Saunders, Managing Director of analyst firm Conlumino, believes that the disappointment has been amplified by unrealistic expectations of how the Games would affect the sector.

“That the Olympics did not benefit the high street should not come as any real surprise,” Saunders commented.

“While a great national success, there was never any particular reason for the Games to increase consumer spending and many of the postulations that people would rush out to buy new televisions or that an influx of tourists would boost sales in London were based on very specious logic which ignored underlying economic realities.

“Indeed, it now seems that the Games had something of a negative impact as they encouraged more consumers to stay at home watching events with a consequent depletion in retail footfall.

“In the particular case of London, visitors to the city – both domestic and foreign – broadly shunned retail, while the shopping patterns of regular Londoners were somewhat disrupted.

“The one tangible impact of the Olympics is the effect on confidence. As our own data for August shows, the inspiration of the games had a slight positive impact on consumer sentiment. However, even this needs to be placed in context.

“The increase was far from transformative: it merely made a negative situation a bit less negative; as great as the Games were they did not have to the power to dispel the negative headwinds that continue to act against the economy and impact on the consumer.”


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