UK retail sales are increasing, but consumers are spending less.
Trading Economics figures show that retail sales volumes rose by an estimated 0.4 per cent in August, following a fall of 1.1 per cent in July. Sales volumes are up 0.3 per cent in the three months to August 2023.
However, most of this increase was on food, with non-food items only increasing by 0.6 per cent and non-store retail volumes falling by 1.3 per cent.
This was a disappointment as retail sales had been expected to rise by 0.5 per cent.
Wealth Club Investment Manager Nicholas Hyett said high street sales in August bounced back after a wet July saw shoppers stay home. Meanwhile, the more robust high street performance dampened online sales as more of us ventured back into the shops.
“While sales weren’t quite as strong as economists had expected, the broad narrative of a relatively strong UK consumer remains intact. However, it’s worth noting that while sales values have ticked up, volumes have continued their recent downward trend. We’re spending more but getting less as inflation bites,” Hyett said.
Economically speaking, the consumer may be robust, but it probably doesn’t feel like that to the individual when the shopping bags get lighter every month.”
