Published on September 9th, 2021 | by The GC Team0
Retail sales growth begins to slow
The growth in retail sales seen over the past few months slowed in August but the bank holiday weekend at the end of the month and the “back-to-school buzz” reportedly contributed to a rise in non-food sales.
According to the BRC/KPMG Retail Sales Monitor, total sales increased by 3.0%, against 3.9% in the same month last year. This is below the 3-month average growth of 6.9% and the 12-month average growth of 10.3%.
Don Williams, Retail Partner at KPMG, provided some perspective:
“Much like the summer weather retail performance in August was mixed. Sales growth on the high street continued to slow, with footfall still below pre-pandemic levels, and online sales took a retreat from the highs of last year, whilst some discretionary non-food categories continued their recovery.
“Overall, the high street saw 3% growth, dented by lower food sales growth of 1.9% as consumers enjoyed a fully re-opened hospitality sector. Online sales fell back by 2.5% compared to August 2020, though online penetration rates remained significantly above pre-pandemic levels, signalling the step up in online shopping is here to stay. Clothing, footwear and accessories continued their recovery with some healthy sales increases but from a much lower base, whilst technology and furniture/appliance categories suffered against very strong comparatives in 2020.”
With the retail recovery showing signs of slowing, Williams said the sector is expected to grow at a more muted rate as retailers face increasing challenges on a number of fronts. Inflation is expected to accelerate, putting pressure on household spending, while retailers face competition from leisure, entertainment and travel when it comes to consumer spending.
Staffing pressures remain and supply chain issues are being widely reported, with raw material shortages and challenges getting product into the UK and goods into consumers‘ hands. This may feed into limited availability of certain products and the spectre of price rises remains.
“Retailers will be pinning their hopes on a more predictable ‘normal’ with white collar workers returning to city centres in greater numbers from this month and a buoyant Christmas fuelled by some of the savings that consumers have made over the last 18 months of lockdown and restricted spending,” Williams said.
“Nonetheless,” he added, “successful retailers will have to work very hard to ensure the right availability of the right product to satisfy the requirements of an ever more demanding customer.”