Retail sales rise as ‘back to school’ and Oasis gigs drive sales
The latest ONS retail sales figures show volumes were up 0.5% in August, driven by clothing and footwear (1.3%), department stores (1.1%) and online (0.7%). In addition, food sales were up 0.5%.
Jacqui Baker, head of retail at RSM UK and chair of ICAEW’s Retail Group, comments: “The uptick in clothing and footwear and department store sales suggest ‘back to school’ and the ‘lipstick effect’ continues to drive sales as consumers are prioritising essentials and smaller, more affordable purchases rather than big ticket items due to the continued squeeze on budgets.
“The sold out Oasis reunion tour also contributed to this month’s uplift - giving a boost to clothing sales. However, cost pressures on households are clear to see, with people cutting back on spend or trading down, and in some cases opting for second hand goods or pre-loved uniform.
“Consumer confidence improved in August likely helped by the Bank of England’s interest rate cut, but fell back in September. The combination of rising inflation, falling pay growth, little chance of another interest rate cut this year, and ongoing budget speculation, could further drag on consumer confidence and in turn, retail sales.
“As a result, the prospect of a booming Golden Quarter is looking less likely unless the government is able to offer a boost in the budget, particularly as retailers expect to see an update on the long-awaited and much-needed business rate reform.”