UK August Retail Sales show 2.7% annual growth

UK’s retail sales in August saw a decline attributed to the Olympic games, latest reports from ONS reveals. August retail sales declined by 0.2% but the annual rise was at 2.7% coming well within market expectations but still downbeat data. Sales volumes were lower by 0.3% in August excluding fuel sales. Non store retail volumes dropped 6.7% in comparison to July marking one of the sharpest declines since end of 2007.

Online retailers said that the lower sales was on account of consumers watching the Olympic games which saw a drop in online shopping as well. On the contrary, Sporting goods and Toys saw a boost in sales, especially in regards to football accessories and other similar items ahead of the upcoming European Championships.

Retail sales increased 0.6% between the periods of June through August. Sales was slightly lower as the three months up to July saw sales increase by 0.7%.

It is quite clear that Britons have been cutting back on spending on non essential items as incomes see a squeeze and soaring food, fuel and utility bills, further tightening the grip was the increased taxes and slower pay rises.

A meaningful recovery is unlikely to happen in the near future despite easing inflation and drop in unemployment levels. Previous surveys indicated that retails saw a disappointing sales during the London Olympics during August with the exception of big chains such as John Lewis, Debenhams and Dixons recording solid sales growth.

Data suggests that some stores were forced to cut prices in order to sell. The annual estimated store price inflation remained steady at 0.2% but the main pressure came from the drop in prices especially in the household goods and clothing sector.

Prior to the release the GBP dropped against the US Dollar on concerns that the retail sales might heighten concerns on the UK’s fragile economy. The British Pound was down 0.2% trading at $1.6180 ahead of the report.

To access the original report from the ONS, click here

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