Online retailers saw demand for DIY and gardening items as overall retail sales in August increased, driven by food.

According to the latest BRC-KPMG Retail Sales Monitor, UK Total retail sales increased by 1.0% year on year in August, against a growth of 4.1% in August 2023. This was above the 3-month average growth of 0.4% and below the 12-month average growth of 1.2%.

Food sales increased 2.9% year on year over the three months to August, against a growth of 8.2% in August 2023. This is below the 12-month average growth of 5.0%. For the month of Aug, Food was in growth year-on-year,

Non-Food sales decreased 1.7% year on year over the three-months to August, against a decline of 0.2% in August 2023. This is above the 12-month average decline of 2.0%. For the month of August, Non-Food was in decline year-on-year.

In-store Non-Food sales over the three months to August decreased 2.8% year on year, against a growth of 1.3% in August 2023. This is below the 12-month average decline of 2.1%.

Online Non-Food sales increased by 1.5% year on year in August, against an average decline of 1.7% in August 2023. This was above the 3-month average increase of 0.3% and above the 12-month average decline of 1.8%.

The online penetration rate (the proportion of Non-Food items bought online) increased to 34.7% in August from 34.1% in August 2023. This was below the 12-month average of 36.3%.

Helen Dickinson OBE, Chief Executive of the British Retail Consortium, said: “Sales growth picked up in August, particularly for food as people came together to host barbecue and picnic gatherings for family and friends, and for summer clothing, health & beauty products as people prepared for trips away and summer social events. While computing did well as university students made the most of summer discounting and readied themselves for the new academic year, other back to school related sales were weaker than normal as some families opted for second hand purchases.

“Following a difficult summer for much of retail, and the possible weakening of consumer spending as energy bills rise come October, many will be waiting for the Chancellor’s Autumn Budget before finalising their investment strategies. Labour’s first budget is a golden opportunity to make good on their manifesto commitment and fix the broken business rates system which is holding back investment in people, places, technology and limiting growth. Decisive action will benefit working people across the country.”

Linda Ellett, UK Head of Consumer, Retail & Leisure, KPMG, said: “Despite summer finally making an appearance, and a slight uptick in consumer confidence, shoppers did not catch-up their spending during August, with total sales growth of only 1% reflecting the challenging retail environment that is likely to dominate for the rest of this year.

“After many tough months of falling sales, sports and travel equipment enjoyed a welcome boost during this key summer holiday period, and sales of clothing also saw a second month of growth on the high street.  Food and drink sales were positive on the high street, whilst online retailers saw demand for DIY and gardening items with growth at nearly 11%.  Fashion retailers will be hoping sales growth continues as they look to dispose of excess summer stock as we head into the key autumn season.

“Consumer sentiment is gradually starting to improve, but there still remains some nervousness around potential tax rises and the cost of putting the heating back on when the cooler weather arrives. The fragile nature of consumer confidence means shoppers will continue to be driven by price and value, moving from brand to brand to find the best price benefit and we are likely to see retailers using promotional activity to seek to win at this.

“As green shoots of growth start to appear, those retailers looking to seize on slowly returning consumer confidence will need to demonstrate best value for money, as well as tap in to the “experience” factor as consumers focus their discretionary spend on having fun or experiences over owning more ‘stuff’. Winning retailers will need clear differentiation, targeting specific consumer needs, and executing with consistency and clarity.”