Back-to-school boosts UK retail sales in August, CBI says
- Total retail sales grow 2.7%, up from 1.3% in July
- Food sales fall again
- Analysts cautiously optimistic
Children going back to school drove the best monthly rise in British high street sales since January last month, although it was slower than a year ago.
Parents buying school clothing and stationery boosted like-for-like retail sales by 1.3% in August against a year ago, while total sales lifted 2.7%, according to figures from the British Retail Consortium and accountancy firm KPMG.
Economists had been expecting a 0.5% increase in like-for-like sales after a rise of 0.3% in the previous month. In July total retal sales increased at a 1.3% clip on the year.
But both measures were slower than in August 2013, when like-for-like sales rose 1.8% on the year before and total sales gained 3.6%.
Clothing and shoe sales led the rise with the fastest lift in sales since December 2011, which the BRC said indicated higher consumer confidence.
Food was the worst performing category with a new record low three-month average decline of 1.6%, in contrast to 0.1% growth over the last 12 months.
BRC director-general Helen Dickinson said: "Retailers have pointed to the successful launch of their autumn fashion collections helped by the cooler weather, as well as a good response to marketing campaigns for back to school clothing."
Furniture sales also did well as the strong housing market continued, although not as well as in July.
She added: "On the other hand consumers are still taking advantage of record low food inflation. The strength of the economy is not yet consistent across all areas of the country and shop prices fell in August."
KPMG head of retail David McCorquodale said: "Back to school sales and the changing of the season saw fashion retailers put in a strong performance in August. Overall, it has been a very successful summer for non-food retailers, placing them on a firm footing for the autumn/winter trading period and the run-up to Christmas.
"However, not all sectors are seeing their sales grow. The food sector remains in a state of disruption with the share of the 'big four' being challenged on many fronts after a 15-year reign. The like-for-like decline shows the battle is being fought via the prices on the shelves.
"With autumn drawing in, the countdown to Christmas has now begun. This will be a true bellwether of consumer confidence. If shoppers feel secure enough in the future to spend, then retailers could be in for an enjoyable Christmas this year."
Howard Archer at economic researchers IHS Global Insight said elevated confidence, high and rising employment and muted inflation would underpin consumer spending, while a strong housing market also tended to support retail sales.
"This is a pretty encouraging survey overall indicating that consumers are still alive and kicking. It follows on from a robust CBI survey for August, and eases concern arising from softer retail sales in July/June that consumers may be flagging after largely spending at a strong rate through the first half of the year," Archer said.
"However, it is questionable how strong consumer spending can be on a sustained basis until earnings growth picks up appreciably," he added. "The prospect of interest rates starting to edge up before long may also be a concern to a significant number of consumers given that debt levels are still high."