Warmer weather and end-of-season sales boost retail sales 1% in August

Warmer weather and end-of-season discounts helped boost retail sales in August, official figures showed today. 

Volumes were up 1 per cent last month, clawing back some of the ground lost since Covid and the cost-of-living crisis. 

Clothes stores and supermarkets were among the biggest winners, according to the ONS.

However, there are wider concerns that Rachel Reeves' gloomy messaging about tax hikes and spending cuts to come in the Budget could be hitting confidence.   

The growth was ahead of most predictions, with a consensus of economists forecasting a 0.4 per cent increase for the month.

The figure follows a 0.7 per cent rise in volumes in July, which was revised up from a previous estimate of a 0.5 per cent increase.

That was credited to a boost from discounting and sports events including the Euros.

Overall sales volumes rose by 1.2 per cent in the three months to August 2024, compared with the three months to May 2024.

The bump emerged as GfK's Consumer Confidence Index fell seven points in September to minus 20, with significant drops in predictions for personal finances and the general economy over the coming year.

Expectations for the general economy over the next 12 months fell by 12 points to minus 27, while the forecast for personal finances is down nine points to minus three.

ONS chief economist Grant Fitzner said: 'Retail sales rose in August as warmer weather and end of season promotions helped to boost sales, most notably for clothing and food shops. 

'Supermarkets, in particular, contributed to the largest annual rise for food sales since the summer of 2021.

'Looking at the broader picture, retail sales have also increased across the three month and annual period, following strong growth from online retailers. 

'However, sales overall remain slightly below their pre-pandemic level.'

Kris Hamer, director of insight at the British Retail Consortium, said: 'With summer in full swing, sales growth picked up in August.

'Computing performed well as extensive summer discounting encouraged consumers to upgrade their tech, and students organised themselves for the new academic year.

'Food, cosmetics, and fashion sales also had a good month as people hosted family and friends for picnics and barbecues and prepared for summer holidays and other social events.

'Meanwhile, furniture and household goods failed to shine, as people opted to spend their money on experiences instead.

'Clearly, the high cost of living still bears down on consumers, meaning demand may dip further when energy bills rise once again in October.'