MNI DATA ANALYSIS: Aug UK Shop Sales Lowest In Four Months

--BRC July Like-for-Like Sales Up 0.2% y/y; Total Sales Up 1.3%

     LONDON (MNI) - UK retail sales grew for a fourth consecutive month in

August after April's record decline, however the pace of year-on-year expansion

continued to ease from May's 4.1%. The British Retail Consortium (BRC)-KPMG

survey showed growth was driven by the remnants of summer sunshine, which

continued to feed grocery sales. A "back-to-school" effect also boosted sales of

children's clothes and computers. 

     August like-for-like sales rose by 0.2% from August 2017, when they had

increased by 1.3% y/y. Total sales growth of 1.3% was below the 3-month and

12-month averages of 1.8% y/y and 1.5% y/y respectively. 

     --WEATHER AND INFLATION DROVE MODERATE FOOD GROWTH

     August weather combined with inflation in food prices to see food sales

growth continue its run, ranking it second in total sales growth. On the

discretionary side, home and large ticket items made a comeback but their

ranking was low -implying that, on a total basis, growth was constrained.

Topping the total sales ranking was computing, which the report attributed to

the end of school holidays.

     --NON-FOOD STORES CONTINUES TO DECLINE MODERATELY

     Non-food store sales saw a continued tempering of the pace of decline. Over

the three months to August, they decreased by 1.0% on a like-for-like basis and

by 0.1% on a total basis. This was higher than the 12-month total average

decrease of 0.4%.

     --CONSUMERS AND RETAILERS FEELING THE PINCH

     Whilst summer is coming to an end, the pressure on shoppers' incomes is far

from over. 

     "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," said Helen Dickinson, chief executive of

the British Retail Consortium. "And it's not only shoppers who are feeling the

pinch. Retailers are under significant pressure, with rising costs contributing

to a difficult trading environment. The disproportionate burden of business

rates is not helping matters."

     At the same time, retailers are struggling to keep pace with a changing

competitive landscape. 

     "Overall retail spending held up in August, but only just. Whilst any

growth is welcome in the current environment, structural changes within the

industry continue and there is clearly diverging performance across categories

and retail business models. Retailers really need to drive their repositioning,

restructuring and transformation programmes with ever increasing energy and

urgency", said Don Williams, UK retail partner at KPMG.

--MNI London Bureau; +44 203 865 3828; email: jai.lakhani@marketnews.com

--MNI London Bureau; +44208-865-3829; email: Jason.Webb@marketnews.com

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