Retail sales improve modestly
However, economic challenges could prompt shoppers to pump the brakes on spending, warns Myron Jobson.
22nd September 2023 07:45
by Myron Jobson from interactive investor
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Commenting, Myron Jobson, Senior Personal Finance Analyst, interactive investor, says: “Retail sales in August improved modestly on the previous month when wettest July since 2009 and the sixth-wettest July on record since 1836 dampened sales. While weather in August improved, it was still a mixed and unsettled month, but shoppers seemingly made the most of the spells of sunshine to enjoy the last month of the summer holidays.
“Food stores sales volumes picked up last month, as did sales in non-food stores. However, these were partly offset by a drop in the amount of fuel sold, following an increase in prices at the pump. Sales gained by retailers with physical premises were seemingly sales lost for internet retailers, with online sales dipping in August. But the proportion of online sales continues to exceed pre-pandemic levels.
“Despite tighter credit conditions following 14 consecutive interest rates hikes from the Bank of England and cost-of-living pressures, shoppers have exhibited resilience in their spending thanks to a robust labour market and rising wages.
“Looking ahead, Britons face a number of economic challenges for the rest of the year which could curb spending. High winter energy bills and broader cost of living considerations could put pressure on many households to spend cautiously. Wage growth is expected to slow as part of a broader loosening of the job market, which could prompt shoppers to pump the brakes on their spending.”
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