Back to School boosted retail sales rise but confidence remains fragile.

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UK retail sales values were up 1.0% on a like-for-like basis from August 2009, when sales had fallen 0.1%. On a total basis, sales were up 2.8% against a 2.2% increase in August 2009.

Food sales growth slowed a little. Clothing and footwear sales strengthened, helped by new autumn/winter ranges and back-to-school. Homewares edged up but sales were still often deal-driven, with big-ticket items affected by consumer uncertainty over job cuts and income prospects.

Non-food non-store sales (internet, mail-order and phone sales) picked up in August and were 17.8% higher than a year ago, but this was against an exceptionally weak 8% gain in August 2009. 
 

Stephen Robertson, Director General, British Retail Consortium, said: "These results are a slight improvement on last month but this better growth is compared with a very poor performance a year ago and sales were often deal-driven.

"The good news is sales are still growing but anxiety about job cuts and tax rises is putting people off making major spending commitments. Renewed weakness in the housing market particularly affected the furniture and flooring sector.

"But back-to-school wear and the onset of autumn helped clothing and shoes produce a small overall improvement in non-food sales.

"With the Government about to detail its cuts and a VAT rise in prospect, retailers will be hoping consumer confidence doesn't slip over the next few months." 

Helen Dickinson, Head of Retail, KPMG, said:"August 2009 was the worst month of the second half of last year so this year's results are nothing to write home about.  Overall sales performance deteriorated marginally as the month progressed, driven by a slowing in food, but all other sectors continued to show high levels of volatility. Non-food had a better month than July when like-for-like sales declined, but furniture and flooring stayed firmly in negative territory at total as well as the like-for-like level. Clothing picked up with all sub-sectors except women's having a strong month. Despite the recent improvement in consumer confidence, my view is that people remain worried about how they will personally be affected by the fiscal tightening measures. The impact on spending will become more apparent as we move into the higher volume autumn months."

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