Recent data reveals weaker than expected back-to-school sales, impacting non-food sectors.
- Non-food sales have decreased by 1.7% over the past three months, surpassing the yearly average decline of 2%.
- High street sales experienced a 2.8% decrease in non-food purchases, while online sales saw a modest 1.5% increase.
- Clothing and footwear sales struggled as families chose second-hand options.
- Upcoming economic policies could determine future retail investments.
Recent data indicates a significant decline in non-food sales over the three months leading to 24 August, with a decrease of 1.7% year on year, surpassing the 12-month average decline of 2%. This illustrates a shift in consumer purchasing behaviour, driven largely by economic factors and a preference for second-hand items.
High street sales have notably suffered, with a reported 2.8% decrease in non-food transactions, in contrast to a previous growth of 1.3% in August 2023. This reflects a challenging environment for physical retail outlets. However, contrastingly, online sales have experienced a year-on-year growth of 1.5% for non-food items, marking a recovery from the average decline of 1.7% in August 2023. This highlights the evolving consumer trend towards online shopping for bargains.
Helen Dickinson, Chief Executive of the BRC, highlighted that while computer and laptop sales had seen a boost due to back-to-school demand from university students, other categories such as clothing and footwear did not fare as well. The weaker sales in these areas are attributed to families opting for second-hand purchases, further impacting high street sales.
Linda Ellett, UK Head of Consumer for Retail & Leisure at KPMG, noted some growth in sports and travel equipment sales during the summer period, and also observed a second consecutive month of growth in clothing sales on the high street. Despite this, there remains a cautious outlook due to potential tax increases, which may affect consumer sentiment and spending.
The impending Autumn Statement presents an opportunity to address the current business rates system, described as a hindrance to investment and growth by Helen Dickinson. Retailers are particularly focused on the Chancellor’s imminent budget as it could influence strategic financial decisions, especially given the potential rise in energy costs impacting consumer expenditure.
As consumer behaviours shift and economic uncertainties loom, the future of retail sales remains cautiously optimistic but uncertain.
