BRC-KPMG: retail sales slow in August as Olympics steals shoppers’ attention

Total retail sales declined 0.3% in August, against a 0.1% increase in August 2015, according to the British Retail Consortium (BRC) – KPMG monthly retail sales monitor.

This is the weakest performance since September 2014, excluding Easter distortions. BRC-KPMG said the slowdown was driven by ‘lower footfall due to the warmer weather – and is therefore likely to be short-lived’.

BRC chief executive Helen Dickinson noted: “A month of extraordinary achievement for Team GB [in the Rio Olympics] certainly produced a feel-good effect and consumer confidence was up on July. But that generally didn’t translate into extra sales.

“Consumers were enticed towards leisure and outdoor activities rather than shopping, although food did post its strongest performance in more than two years, fuelled by demand for picnic, barbecue supplies and celebratory drinks.

She added: “Care should be taken in reading too much into August’s lacklustre performance. The fact is that so far, little has directly changed for consumers as a result of the referendum, so it’s pre-existing market dynamics that are still driving sales.

“The slowdown in real wage growth in the first half of 2016 and strong competition will continue to weigh on trend growth in total sales – while holiday timings, promotional and seasonal activity will contribute to fluctuations month on month.”

David McCorquodale, head of retail at KPMG, commented:”In contrast to July, August’s retail figures illustrate into somewhat of a U-turn of retail fortunes. Like-for-like sales were down 0.9% on this time last year – painting a disappointing picture, given previous signs of encouragement.

“Sales of women’s fashions performed particularly poorly, despite widespread promotions. The warmer weather made it almost too hot to shop and dissuaded shoppers from looking at newly arrived autumn products. Despite this, jewellery sales continued to benefit from international shoppers taking advantage of the weaker pound.

“Whilst for those at home, some of whom may have opted for a staycation given the exchange rate, the warmer weather put wine and barbecues firmly on the menu.

He continued: “With the bank holiday weekend and ‘back to school’ sales largely falling in September’s figures, it’s unsurprising that children’s fashion and footwear haven’t yet experienced an uplift. Given the volatility of retail sales in the past few months, no doubt retailers will be hoping for a smoother ride in the lead up to Christmas.”

 

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