Retail sales values rose 3.8% year-on-year in August, while retail sales volumes fell 1.6% year-on-year on a non-seasonally adjusted basis, recovering from a fall of 3.3% in July. Food stores sales volumes were down 4%, while household sales saw a decline of 1.6% in volume.
Meanwhile, department stores sales volumes were up 2.9%, with clothing sales also up 1.5% compared to a year before. Non-store sales were also up 0.5%.
Mintel comment:
“July was a disappointing month for the retail sector, with the weather playing a significant part in further depressing demand. Sales (on a non-seasonally adjusted basis) for August show an improved picture, while continuing the overall 2023 trend of value growth but underlying volume decline.
Year-on-year total volume sales were down 1.6%, the shallowest decline of the year in part due to a deep decline (-5.7%) in August 2022 making for easier comparatives. The grocery sector recovered some of the ground lost in July, but with volumes declining 4.9% the market remains tough for grocery retailers with this currently a clear focus area of cutting back from consumers. After a Prime Day and poor weather driving online demand in July, there was a stronger return to the high street in August, with online penetration of sales dropping to 24.9% and online sales growth slowing to 8.7%.
Store-based non-food demand had a much better August than July, with notably marginal volume growth (0.2%) returning to total non-food sales for the first time since December. The poor performance in fashion in July was reversed, with volume growth (+2.5%) returning to the sector. Health and beauty had another difficult month, with a volume decline of 5.0%, with the improved but still not stellar weather, particularly compared to 2022, creating more difficult comparisons for seasonal lines. Home categories remain in overall volume decline, but furniture sales have now seen three consecutive months of, albeit marginal growth, creating some optimism that the bottom of the curve in demand in that sector has been reached.
Mintel’s latest British Consumer Confidence Trackers for August 2023 show that both current and future financial confidence, while still low, are not further degrading significantly and an element of stability in the face of continuing pressure has entered the market. Inflation does remain stubbornly high and consumers are still cutting back, but the avoidance of a further interest rate rise yesterday and improvement in retail sales does give some optimism that while it will be a difficult final quarter for retailers, there will be greater opportunity for discretionary spending than in 2022.”
