Clothing sales suffer as retail sales weaken in August - BRC
By Oliver Haill
Date: Tuesday 04 Sep 2018
(Sharecast News) - UK retail sales were soft last month, a fresh survey of the industry confirmed on Tuesday, as growing inflationary support was offset by slowing food growth and continued weakness for non-food shops, especially clothing.
In August, UK retail sales increased 0.2% on a like-for-like basis over the same month last year, down from the 0.4% average in the first seven months of 2018, the British Retail Consortium revealed, with total sales up 1.3% compared to a 3-month average of 1.8% and 12-month average of 1.5%.
Inflation climbed to 0.1% in Aug from the depreciation of 0.7% between January and July, led by food inflation increasing steadily to 1.9% by August from the 0.4% in March.
Non-food sales fell 1.0% in the three months to August on a LFL basis, showing the preceding period's rise to have been a one-off after nine consecutive periods of negative growth. Total non-food sales increased 0.1%. In-store LFL non-food sales declined 3.5% and 2.1% on a total basis. Clothing sales were singled out as particularly soft.
Food sales were fairly strong, though LFL sales for June to August were up 2.6% compared to the 3.1% in the preceding three-month period. This implied LFL growth for the month of August of 1.9%, down from the 2.5% in the year to date.
"The trend of weak retail sales growth in 2018 showed little sign of abating as the Summer came to a close this August," said BRC chief executive Helen Dickinson. "The continued pressure on people's disposable income has meant that some shoppers are increasingly less able to spend on the more discretionary non-food items such as clothing and footwear."
Analysts at Jefferies suspected the slowing food trend may reflect the lack of incremental factors boosting demand, with weather and World Cup helping temporarily lift May-July.
Jefferies noted that housing related spending rebounded after a very poor July, with furniture especially strong
"Brexit uncertainties likely continued to weigh on consumers' willingness to spend, if one considers that non-food expenditure so far in 2018 (-1.1% LFL) was actually softer than in 2017 (LFL -0.4%), despite more supportive trends in disposable incomes (and further gains in employment)."
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