UK retail sales volumes, including petrol, rose by 0.8% month-on-month in August, according to the Office for National Statistics (ONS), matching the consensus forecast and further surpassing their pre-coronavirus (COVID-19) pandemic level.
Year-on-year growth increased to 2.8%, from 1.4% in July, marginally above the consensus of 2.7%.
The ONS’s deputy national statistician for Economic Statistics Jonathan Athow noted: “Retail sales continued to grow, further surpassing their pre-pandemic level. Sales of household goods thrived as the demand for home improvement continued and, despite a dip this month, online sales remained high.
“However, clothing stores continued to struggle with sales still well below their February level. Overall, the switch to greater online sales means the high street remains under pressure.”
UK retail sales volumes rose by 3.6% month-on-month in July as clothing sales grew and people spent more money on petrol as the coronavirus lockdown eased.
‘Enforced savings’ bring spent
Samuel Tombs, chief UK economist at Pantheon Macroeconomics commented: “Retail sales benefited in August from households spending more of the ‘enforced savings’ that they accumulated during the second quarter, and from many more people than usual foregoing foreign holidays this year.
“Overseas trips by UK residents likely were a tiny fraction of the 11.6 million that occurred in August 2019; Heathrow passenger numbers were down 82% year-over-year in August.
“This likely offset comfortably the hit to spending in the UK from an equally sharp decline in the number of overseas residents visiting Britain, who totalled a smaller 4.4 million in August 2019.
“Even if UK residents who stayed in the country did not go on holiday, they still will have purchased food and other goods that normally they would have bought abroad.”
Tombs added: “Retail sales plausibly will remain above last year’s average in the remaining months of this year, as Covid-19 appears to have triggered a rotation away from spending on services towards goods.
“For instance, food store sales, which were 3.5% above their 2019 average level in August, have benefited at the expense of people avoiding restaurants. Nonetheless, we judge that households’ overall expenditure still will be about 5% below its pre-Covid level at the end of this year.”