Department stores and online shopping drive rebound in UK retail sales

UK retail sales returned to growth last month amid a boost from online shopping and department stores, according to official figures.

The Office for National Statistics (ONS) said retail sales volumes increased by 0.5% in August, compared with the previous month.

It represented a recovery after a decline of 0.5% in July.

It was a stronger performance than widely expected, with economists having predicted a decline of 0.2% for August.

Experts at the ONS said stronger trading by non-store retailers, which predominantly covers online firms, helped to support the uptick in performance.

Non-store retailers reported that sales volumes lifted by 1.7% for August compared with the previous month, bouncing back from a slump in demand in July.

The figures also showed a recovery in sales from department stores, lifting to a three-month high of 1.8% for the month after firms had said “stock availability issues” weighed on trading in July.

Clothing and footwear sales also improved for the month, rising by 1.1% compared with July.

It represented a sales recovery after a 2.7% fall in July, which had marked the sector’s worst performance for more than a year.

Meanwhile, food retailers reported a 0.3% increase in monthly sales.

The ONS said retail sales volumes increased by 0.9% over the three months to August, compared with the previous three months.

ONS senior statistician Jon Gough said: “Retail sales increased in the latest three months, with a particularly strong June for online outlets helping to boost their sales across the period.

“Food store sales also rose, with supermarkets doing well in July and August.”

Oliver Vernon-Harcourt, head of retail at Deloitte, said: “Retail sales performed better than expected in August as improving consumer confidence and the last of the summer heatwaves encouraged an uptick in spending across almost all categories.

“Consumers have bounced back after a minor spending setback in July, with sales volumes across the summer indicating a willingness to loosen the purse strings and spend on not just smaller luxuries, but other purchases too.”

Jacqueline Windsor, head of retail at PwC UK, said: “Retailers will be hoping that this positive momentum continues in the critical run-up to Christmas.

“However, with inflation starting to rise, and energy and grocery price increases already forecast for the autumn, shoppers may struggle to stretch their budgets as far in the coming months.”