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Retail sales across Britain fell last month, in another sign that the economy cooled over the summer, and as people spent more time eating and drinking in bars and restaurants.
Sales volumes fell by 0.9% in August, dashing expectations of a 0.5% rise in sales, and comes after retailers suffered a 2.8% fall in July.
It suggest retailers had a tough summer, as the initial surge in demand following the spring reopening faded.
New figures just released by the Office for National Statistics shows that spending in food stores fell — as more people dined out following the easing of lockdown rules.
There was also a fall in department store sales, while spending on motor fuel picked up as more people returned to the road.
Jonathan Athow, ONS deputy national statistician for economic statistics, explains:
“Sales fell again in August, though not nearly as much as in July and, overall, remained above their pre-pandemic level.
“Other data suggest that the drop in food stores’ sales is linked to an increase in eating out following the lifting of coronavirus restrictions.
“Meanwhile, motor fuel sales increased on the month as people ventured out more, but they remained below pre-pandemic levels.”
Here’s the details:
- Food store sales volumes fell by 1.2% in August 2021, with some evidence to suggest that the further easing of hospitality restrictions had an impact on sales; people increased their social spending such as eating and drinking at restaurants and bars.
- Non-food stores reported a fall of 1.0% in sales volumes in August 2021, driven by falls in department stores (negative 3.7%) and other stores, such as sports equipment and computer stores (negative 1.2%).
- Automotive fuel sales volumes rose by 1.5% in August 2021 as people continued to increase their amount of travel; however, they remained 1.2% below their pre-pandemic February 2020 levels.
- The proportion of retail sales online rose to 27.7% in August 2021 from 27.1% in July, substantially higher than the 19.7% in February 2020 before the pandemic.
Compared with a year ago, sales volumes were flat — but that still leaves them 4.6% above their pre-pandemic levels:
More details and reaction to follow…
We’ll also be tracking Europe’s energy price crunch which is threatening to derail the region’s economic recovery. The supply crunch is hitting profits, and forcing some manufacturers to suspend work – including at two UK fertiliser plants.
Investors are also watching for the latest US consumer confidence report, for signs that the Delta variant has hit confidence.
We also get updated eurozone consumer price data, likely to confirm that inflation hit a decade high of 3% in August.
European markets are set to open higher on the final trading day of the week.
- 7am BST: Great British retail sales for August
- 10am BST: Eurozone inflation rate for August (final estimate)
- 3pm BST: University of Michigan survey of US consumer sentiment in September