October 4, 2022
UK retail sales fell more than expected in August

Retail sales fell in August as UK consumers grapple with rising prices and high energy costs, increasing the risk of a recession.

According to data published on Friday by the Office for National Statistics, the volume of goods bought in the UK fell 1.6 per cent between July and August, reversing smaller expansions in the previous month.

It was a bigger drop than the 0.5 percent contraction forecast by economists polled by Reuters.

The ONS said that “rising prices and cost of living” are affecting sales volumes.

The figures show how high inflation is affecting consumers and the broader economy. The £150bn government-support energy package announced earlier in the month is expected to limit the blow from the recent surge in gas prices, but does not foresee a potential slowdown.

Line chart of Great Britain, February 2020=100 showing that retail sales fell more than expected in August

All major sectors declined during the month.

Sales at non-food stores declined 1.9 percent, department stores contracted 2.7 percent, home goods stores declined 1.1 percent and clothing declined 0.6 percent.

Online sales and fuel declined by 2.6 per cent and 1.7 per cent, respectively. Food store sales fell 0.8 percent.

In the three months to August, retail sales volume was down 1.1 percent from the previous three months.

Linda Petherick, retail lead at consultancy Accenture, said that “with a difficult winter to come, it will be a matter of concern for retailers that buyers have reined in their spending despite the already sweltering summer”.

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