August Food sales ‘flat’ despite decent overall retail figures, says ONS

Food store sales remained flat in August, according to statistics published yesterday (september 20).

Overall figures revealed retail sales increased for a 52nd consecutive month in August despite a rise in prices, the Office for National Statistics (ONS) said.

Retail sales volumes rose 1.0% month-on-month, driven by a rise in non-essential items and clothing. Overall retail sales increased by 2.4% year-on-year, up from 1.4% in July.

Kate Davies,  senior statistician at the ONS, said: “Within this month’s retail sales we are seeing strong price increases across all store types compared with a year ago, reflecting wider inflationary pressures.

“However, we are still seeing underlying growth in sales volumes, and with strong growth in non-essential purchases as consumers continued to buy more from non-food stores.”

Hugh Fletcher, global head of consultancy and innovation at -commerce consultant Salmon, added: “It’s unsurprising to see online retail experiencing continued year-on-year growth (15.6%) as shoppers crave greater convenience in their daily routines.

“However, the sector as a whole should take note that expenditure in food stores and petrol stations were flat, indicating that shoppers were predominantly spending on non-necessity or even luxury goods and services. The summer was likely a strong contributor to this as schools were on break and tourism around the country would have been bolstered. In the coming months, we are very likely to see a noticeable dip as this kind of spending reduces now that the summer season is over, and uncertainty reigns over Brexit and house prices. At this point, it’s vital the retailers start to look ahead to the next peak trading period and ensure they are ready to capitalise.”

“Events like Black Friday and Christmas, and increasingly Halloween, offer huge opportunities to reap additional gains. But as consumers look to purchase items they want, not need, a focus on online and innovation will be absolutely paramount – in fact our own research found that 60% would more likely shop with ‘digitally innovative’ retailers. This is all about accessibility and convenience.

“The quicker and easier it is to buy from a retailer, the more popular that retailer will be. If retailers can combine a peak period with being the easiest way to shop – they are going to win.”

The ONS data echoes figures released earlier this month by the British Retail Consortium (BRC).

Rachel Lund, head of retail insight and analytics at the BRC, said: “Retail sales figures are notoriously volatile and with a number of factors making reliable seasonal adjustment nigh on impossible, the health of consumer spending should be assessed with caution.

“Pressures on consumers’ budgets remain and with lending at levels seen in the run-up to the last crisis, downside risks still remain. Moreover, a no-deal outcome in trade negotiations with the EU could leave consumers facing price increases of up to 30% on some products, which will do substantial damage to growth in sales volumes.”

 

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