High Streets Initiative · 6 September 2017

Homewares, fashion and back-to-school give high street retail end of summer boost

Beautiful young African woman measuring waist with tape and writing down the results while standing in her workshop
Positive sales for August 2017 ignored the declining purchasing power of UK households

High street retail sales bounced back in August thanks to strong performance in a number of non-food sectors, despite inflation pulling down the spending power of UK households.

According to the British Retail Consortium’s (BRC) Retail Sales Monitor, produced with KPMG, year-on-year sales for August 2017 increased by 1.3 per cent, having represented the poorest month of the year for retailers in 2016.

Autumn fashion lines, back-to-school ranges and home furnishings were attributed by experts to the steady end to the summer.

On a total basis, the 2.4 per cent sales rise in August also represented the strongest growth for retailers since Easter.

Don Williams, a retail partner at KPMG, suggested a rise in homeware sales was a result of Brtis choosing “staycations” over heading abroad, with home furnishing retailers not having to compete with a summer of Olympic sport.

“Retailers taught us a thing or two about back-to-school, with children’s clothes and footwear obtaining top-marks in terms of sales,” he added.

Helen Dickinson, BRC chief executive, said: “August provided a welcome pick-up in retail sales across channels, with non-food returning to growth as shoppers’ attentions turned to homewares, autumn clothing ranges and the new school term.”

However, Dickinson said strong figures should be considered alongside poor performance in summer 2016, and warned of “stark challenges” lurking around the corner for retail businesses.

Slow wage growth, at 2.1 per cent, continued to trail the rising cost of household goods, and Dickinson urged policy makers to protect consumers from further cost pressures post-Brexit.

She added: “Purchasing decisions are very much dictated by a shrinking pool of discretionary consumer spend, with the amount of money in people’s pockets set to be dented by inflation and statutory rises in employee pension contributions in a few months’ time.”

Ahead of a further squeeze on consumer spending, Williams suggested retailers had benefited from shoppers “turning a bling eye” to incoming pressures.

“The industry now needs to overcome further devaluation of the pound and the increased costs therein,” he added.

This article is part of a wider campaign called the High Streets Initiative, a new section of Business Advice championing independent and small retailers by identifying the issues that put Britain’s high streets under pressure. Visit our High Streets Initiative section to find out more.

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ABOUT THE EXPERT

Simon Caldwell is a reporter for Business Advice. He has a BA in politics and communications from the University of Liverpool, and previously worked as a content editor in the ecommerce industry.

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