Retail sales grow for fourth consecutive month as online sustains

Retail sales volumes grew by 0.8% in August compared with July, the fourth consecutive month-on-month increase for the sector, new figures published today by the Office for National Statistics (ONS) have shown.

Sales volumes were also 4% higher compared to pre-Covid levels in February, as retail continued its recovery. This was unsurprisingly fuelled by a sustained shift to eCommerce since the pandemic struck, with online sales 46.8% higher compared to February.

Online as a proportion of all sales was 28.1% in August, which was a slight fall from 28.9% that was recorded in July. Additionally, the value of retail sales was 2.5% lower than July, which may be explained by many physical stores as well as bars and restaurants reopening from July.

And online food sales fell 4.6% month-on-month in August, which is in line with a reduction in online grocery sales also recorded by Kantar earlier this week. This is likely partly due to the government’s Eat Out to Help Out scheme in August, which encouraged consumers to spend more money in food outlets.

In-store sales varied significantly across different areas of retail. Household goods store sales were 9.9% higher in August compared with February, driven by growing demand for home improvement items. But clothing stores were 15.9% lower than February levels.

Commenting on the figures, Lynda Petherick, head of retail for Accenture UK and Ireland said: “August’s retail sales are further evidence that consumers were getting back to normal, as sales stabilised in the run up to the typically busy “back-to-school” period. However, a dark cloud still hangs over the sector which means the apparent rebound could prove to be a false dawn. The recent tightening of lockdown measures, both locally and nationally, will be a bitter pill to swallow for retailers, and could lead to a steep drop in consumer confidence in September.”

Mona Bitar, EY UK&I consumer leader added: “It’s encouraging to see healthier retail sales data. Consumers are tentatively gaining more confidence returning to the shops and online sales continue to show their strength – clearly some pandemic habits are sticking.”