Essential reading for retailers and suppliers in the home improvement market

Retail sales up in August with home improvement a standout sector

Published: 5 September 2017 - Jack Cheeseman
 

In August, UK retail sales increased by 1.3% on a like-for-like basis from August 2016, when they had decreased 0.9% from the preceding year.

On a total basis, sales rose 2.4% in the period covering July 30 – August 26, against a decline of 0.3% in August 2016, which had been the poorest performance of the year. This is the strongest growth since Easter, above the three-month and 12-month averages of 1.9% and 1.6% respectively.

Over the three months to August 2017, In-store sales declined 1.4% on a Total basis and 1.9% on a Like-for-like basis.

Over the three-months to August, Non-Food retail sales in the UK increased 0.6% on a like-for-like basis and 0.9% on a total basis.

Online sales of Non-Food products grew a healthy 11% in August, above both the three-month and 12-month averages of 9.8% and 8.8% respectively.

Homewares and home improvement were highlighted as standout areas in August, pointing to the influence of ‘staycations’ this year.

This news comes after the IMRG Capgemini Sales Index for August reported that bad weather had hit summer sales.

Helen Dickinson OBE, chief executive, British Retail Consortium, commented: “August provided a welcome pick-up in retail sales across channels, with Non-Food returning to growth as shoppers’ attentions turned to homewares, autumn clothing ranges and the new school term.

“However, these figures tell a less positive story about the health of consumer spending than it might seem at first glance. Non-Food sales have only just recovered to levels seen two years ago, after a dismal August in 2016.

“Stark challenges lurk around the corner for the retail industry,” she continued. “Purchasing decisions are very much dictated by a shrinking pool of discretionary consumer spend, with the amount of money in people’s pockets set to be dented by inflation and statutory rises in employee pension contributions in a few months’ time. It’s therefore crucial to protect consumers wherever possible from further cost pressures.”

Don Williams, retail partner at KPMG, added: “Despite the ongoing challenges for the industry, retailers achieved reasonable growth in August, which is positive news for the industry. Even non-food categories experienced an uptick – a welcome relief given the poor performance recently.

“Growth in home improvement sales – including furniture – point to the influence of staycations, although it could also be that home furnishing retailers are not having to compete with the likes of the Olympics for attention this year.

“Mirroring the successes of the high street, online sales continued to go from strength to strength, with all categories noting growth.

Joanne Denney-Finch, chief executive, IGD, said: “Shopper confidence has been building. 23 per cent expect to be financially better off over the next 12 months, compared with 20 per cent in the election month of June, and 17 per cent intend to focus more on quality in their grocery shopping rather than saving money, the highest level since last September.”

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