UK Retail Sales Beat Expectations During Sunny Spell in August
UK retail sales picked up pace in August after consumers splashed out on food and clothing to take advantage of sunny weather.
The volume of goods sold in stores and online increased 1.0% in August, the Office for National Statistics said on Friday. The reading, which was stronger than the 0.4% increase expected by economists, follows a revised gain of 0.7% in the previous month.
Sales volumes rose 2.5% in the year to August, the largest annual gain since February 2022. Overall, volumes have almost recovered back to pre-Covid levels seen in February 2020.
The figures suggest British consumers were optimistic in August despite a wave of anti-immigrant riots that gripped parts of England earlier in the month and Prime Minister Keir Starmer's warnings of tough fiscal decisions ahead. Separate data released earlier on Friday showed consumer confidence turning negative in September, which research firm GfK attributed to concerns about the Labour government's tax and spending plans.
Nonetheless, households have seen wages grow faster than prices, while inflation for some staple goods like clothing and food cool down. Sunny weather also boosted food sales, which recorded their biggest annual jump since 2021.
British retailers Ocado and Next lifted their sales outlook for the rest of this year after a stronger-than-expected third quarter. Next said shoppers are already spending on Autumn clothing and buying more full-price items.
Separate figures from the British Retail Consortium showed retail sales recorded their strongest growth since March. Consumers are still indulging in small luxuries, helping fuel a bounce back in card spending in August after two months of declines, according to Barclays.
Source : Bloomberg
