Yesterday’s figures showing a decline in monthly retail sales during August ‘could have been much worse’, according to analysts.
The Office of National Statistics said sales fell 0.2% on July’s volumes, dampening hopes of the market’s recovery.
But Nida Ali, economic advisor to the Ernst & Young ITEM Club, said that while the decrease was discouraging, it could have been much worse.
Ali said: “Retail sales have held up reasonably well in the past two months and, despite the fall, sales in the three months to August have grown by 0.3% — compared to the previous three months. Given the current squeeze on consumer wallets, we wouldn’t have been surprised with a much bigger negative.”
Ali acknowledged, though, that the struggle on the high street remains far from over, with inflation expected to rise further on the back of hikes in utility bills and wage growth sluggish.
“Recent data such as yesterday’s unemployment figures make the outlook even more subdued. We don’t envisage an improvement in any of these factors just yet, and the retail sector is likely to face the brunt of it in the coming months.”
The ONS said this week that despite the overall drop, internet sales actually increased during August and now account for almost 10% of the market.