UK retail sales unexpectedly rose in August, defying forecasts of a decline. Sales volumes increased by 0.5 per cent during the month, reversing a 0.5 per cent decline in July, the Office for National Statistics (ONS) reported. Economists had anticipated a 0.2 per cent fall in sales.
Hot weather contributed to a strong rebound in both online shopping and department store sales. Online spending jumped 2.5 per cent after a 4.2 per cent fall in July, increasing its share of total retail spending from 28.4 per cent to 28.8 per cent. Department stores also saw a recovery after stock shortages in the previous month, and clothing retailers regained some of July's losses.
Despite the overall rise, fuel sales dropped by 1.3 per cent in August as prices increased sharply. Retailers informed the ONS that higher fuel prices appeared to be altering consumer behaviour, with some motorists partially filling their tanks.
Sandra Prince, head of consumer at Lloyds, noted that August's warm weather delayed the usual shift towards autumn purchases. She also suggested that the late bank holiday weekend and back-to-school shopping likely supported demand. Andy Carlisle, consumer goods and retail lead at Accenture, commented that the figures might still be a "slight disappointment" for retailers hoping for a stronger summer finish, as spending momentum faded and rising household costs encouraged shoppers to tighten their budgets.
Retail sales volumes concluded August at their second-highest level since April 2022, just below the level reached in June.