- Written by Noor Nanji
- Business correspondent, BBC News
Image source, Getty Images
Retail sales rose in August as customers “spent on self-care”, new figures show.
Non-food sales saw their best month since February, supported by a rise in health and beauty spending, according to the British Retail Consortium (BRC) and KPMG.
However, clothing and footwear saw weaker growth.
One reason for this is that families are left until the last minute to purchase school uniforms, the BRC said.
Overall, the value of retail sales rose 4.1% in August compared to the previous year.
Helen Dickinson, chief executive of the British Retail Consortium, said: “Sales figures reflect the improvement in consumer confidence in August, and retailers are hopeful that this overall upward trend will continue.”
However, with prices still rising at an annual rate of 6.8% in July, the BRC said the rise in the value of goods sold had, in fact, masked a potential decline in the volume of goods sold.
Consumers buy fewer goods, but thanks to inflation, they spend more.
Paul Martin, head of UK retail at KPMG, said the bounce would come as a “relief” for many retailers.
“Health and beauty and food and drink were the strongest performing categories on the high street and online, as consumers made the most of the short spells of sunshine to enjoy the summer holidays,” he said.
Inflation – the rate at which prices rise – has fallen from its recent highs.
But despite this, shoppers continue to “look for good deals” to stretch their money, Martin said.
“With shoppers becoming more calculative and more aware of what they get for their money than we’ve seen in a long time, retailers are going to have to fight harder for every sale,” he said.
Dickinson said the easing of inflation would “certainly be welcomed by consumers.”
But it warned that rising interest rates and rising winter energy bills are likely to put pressure on many households to spend cautiously in the coming months.
“Retailers are combating this by clearly focusing on great value for consumers, expanding budget ranges, and finding ways to reduce costs where possible,” she added.
However, there was a bleaker outlook from Barclaycard as its data showed card spending grew by 2.8% year-on-year in August – significantly lower than July’s growth figure of 4%.
The credit card company said rainy weather cast shadows on Main Street. However, she said entertainment provided a welcome boost, driven by a 101% increase in cinema spending, driven by popular summer blockbusters Barbie and Oppenheimer. He said: “Wet weather has affected high streets and hospitality venues in August, but Britons are still keen to have unforgettable summer experiences.
She added: “Barbie and Oppenheimer’s huge success at the box office meant entertainment enjoyed another strong month, while holidays abroad boosted international travel, pharmacy and health and beauty.”
Barclaycard also said consumers have noticed that some food and beverage products contain premium ingredients that have been discounted or devalued, known as “stinging.”