Wet & dull weather hit sales in August
UK retail sales values fell 1.0% on a like-for-like basis, from August 2007, when they had risen 1.8%. Sales have now been lower than a year ago in five of the past six months, the worst since summer 2005.
Very wet and dull weather hit sales in August. A few sunny days, together with extended clearance events, helped some but underlying trade remained tough, with widespread discounting.
Clothing and footwear remained poor. Furniture and homewares were well down on a year ago, despite continued discounts and promotions.
Record-low consumer confidence and increasing demands on household budgets meant shoppers looked for value and planned spending carefully to take advantage of the widespread promotions and discounts. Housing market weakness continued to hit big-ticket homewares.
Stephen Robertson, Director General, British Retail Consortium, said:
“Miserable weather washed out hopes of a summer boost for retailers, already suffering the slowdown. Annual like-for-like sales fell in five of the last six months, the first time this has happened since 2005. Footwear was the only other sector where sales rose, boosted by children's shoe sales.
“Prospects for customers and retailers are inextricably linked. Helping retailers keep prices down by cutting regulatory costs is the best way the Government can assist hard-pressed customers. It must think again on business rate supplements and empty property rates relief and consider carefully where the minimum wage goes next.”
Helen Dickinson, Head of Retail, KPMG, said:
“The only good news is that the results do not show a significant and further deterioration of the trend over the previous few months but there is no doubt August was another disappointing month for UK retail. We continue to see total UK sales growing compared to same period last year but with like-for-like sales falls across almost all the non-food sectors.
The exception was footwear where women's and children's footwear sales showed marginal like-for-like growth in what is a challenging environment for all. There is also a wide variation in the performance of individual retailers and across the month, as many have used tactical promotional activity to drive sales, particularly around discretionary purchases."
Sector Like-for-Like performance
Sales were not as bad as in June and July, though still below their year-earlier level and often clearance-driven. Childrenswear and core basics held up better than adults' clothing, which is now often seen as more of a discretionary purchase by shoppers coping with shrinking budgets.
Womenswear was slightly better than menswear, with new autumn transitional ranges giving gains for some: knitwear, jackets and jeans were popular on chillier days. Top-end designerwear continued to outperform.
Despite extended heavy discounting, sales improved only marginally, to just above their August 2007 level. The gain was driven by children's, picking up after two weak months, helped by back-to-school. Women's sales were only just up on a year ago, as in July.