August saw a bounce back in retail sales growth to 4.1%, which will come as a relief for many retailers.

According to the latest BRC-KPMG Retail Sales Monitor for August 2023, UK total retail sales increased by 4.1%, against a growth of 1.0% in August 2022. This was above the 3-month average growth of 3.6% and in line with the 12-month average growth of 4.1%.

Food sales increased 8.2% on a Total basis over the three months to August. This is above the 12-month average growth of 8.0%. For the month of August, Food was in growth year-on-year.

Non-Food sales decreased 0.2% on a Total basis over the three-months to August. This is below the 12-month average growth of 0.9%. For the month of August, Non-Food was in growth year-on-year.

Over the three months to August, In-store Non-Food sales increased 1.3% on a Total basis since August 2022. This is below the 12-month average growth of 3.6%.

Online Non-Food sales decreased by 1.7% in August, against a decline of 6.1% in August 2022. This was shallower than the 3-month and 12-month declines of 3.1%.

The proportion of Non-Food items bought online (penetration rate) decreased to 34.1% in August from 34.7% in August 2022.

Helen Dickinson OBE, Chief Executive of the British Retail Consortium, said: “Sale of non-food products had their best month since February, particularly for health and beauty products as retailers continued to invest in new, exciting brands, and customers splurged on self-care. The sales figures reflected the improvement in consumer confidence in August, and retailers hope this general upwards trend will carry on. Not all areas benefitted, clothing and footwear saw weaker growth as families held back spending on children’s uniforms and other back-to-school goods until the last minute.

“Easing inflation will certainly be welcomed by consumers, but as the rate of price rises falls, so will the extra spending needed by consumers. As a result, sales growth may fall in the coming months, even if volume growth does not. Furthermore, high interest rates and high winter energy bills will put pressure on many households to spend cautiously. Retailers are combatting this through a clear focus on great value for consumers, expanding budget ranges, and finding ways to cut costs where possible.”

Paul Martin, UK Head of Retail, KPMG, said: “Health, beauty and food and drink were the strongest performing categories both on the high street and online, as consumers made the most of brief spells of sunshine to enjoy the summer holidays. Internet retailers continue to struggle as online sales fell yet again in August, dropping by 3% year on year.

“As summer comes to an end, retailers will have their sights firmly set on the most crucial period of trading as consumers get ready for Christmas. Inflation levels are heading in the right direction, albeit much more slowly than hoped, and savvy shoppers will be Christmas bargain hunting much earlier this year, as price continues to drive decisions and consumers seek out good deals to stretch their budgets.  With shoppers becoming more calculated and aware of what they are getting for their money than we have seen for a long time, retailers will have to fight harder for every sale.

“Having survived the pandemic and continuing to battle through the cost-of-living crisis, we are already starting to see the resilience of the sector begin to fade and high street casualties are starting to emerge. Maintaining consumer confidence as we head into the golden quarter will be absolutely vital for some in the sector, who will need a good Christmas in order to continue trading in 2024.”