Olympics upset retail sales in August

LONDON, ENGLAND – AUGUST 23: Members of the women’s gold medal winning hockey team pose after arriving home at Heathrow Airport on August 23, 2016 in London, England. The 2016 British Olympic Team arrived back to Heathrow on a British Airways flight today having finished second in the medal table at the Rio Olympics. They totalled 67 medals including 27 Gold and 23 Silver in Great Britain’s strongest Olympic performance in over a century. (Photo by Stuart C. Wilson/Getty Images)

The Olympics has diverted consumers’ attentions away from shops in August, as the warm weather continues and money is instead spent on leisure activities and the outdoors.

On a total basis sales declined by 0.3% against a 0.1% increase in August 2015. This is the weakest performance since September 2014.

Total UK retail sales rose just 0.6%, half the rate of the 12-month average of 1.2%, on a three-month basis. Over the same period, total non-food sales rose 0.4%, significantly slower than the 12 month average of 1.9%.

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British Retail Consortium CEO Helen Dickinson said the feel-good effect and consumer confidence was up on July but that it didn’t translate into sales: “Consumers were enticed towards leisure and outdoor activities rather than shopping.”

But she added, “Care should be taken in reading too much into August’s lacklustre performance. As we’ve seen in the last couple of months, data portending the health of the economy paint a volatile picture.”

Head of Retail at KPMG, David McCorquodale picked up on a “u-turn of retail fortunes”, where sales were down 0.9% on this time last year. He said: “Sales of women’s fashions performed particularly poorly, despite widespread promotions. The warmer weather made it almost too hot to shop and dissuaded shoppers from looking at the newly arrived autumn products.”

He added: “With the Bank holiday weekend and ‘back to school’ sales largely falling in next month’s figures, it’s unsurprising that children’s fashion and footwear haven’t yet experienced an uplift. Given the volatility of retail sales in the past few months, no doubt retailers will be hoping for a smoother ride in the lead up to Christmas.”

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