EY comments on today’s ONS retail sales figures for August

Silvia Rindone, EY UK&I Retail Lead comments:

“The latest figures from the Office for National Statistics continue to paint a complex picture for the retail landscape. Consumers, ever adaptive, are recalibrating their spending habits in response to economic pressures and uncertainty. The tightening of belts has led to a shift in consumer behaviour that isn’t quickly reversible as people grow accustomed to new ways of working and spending.

“August’s retail performance was uneven, with consumer spending diverging significantly across categories, with travel and hospitality faring better than fashion. Retail sales volumes rose by 1.0% in August, with supermarkets and clothing retailers reporting a boost due to warmer weather and end-of-season sales. Food stores also reported an unseasonably strong month with a rise in sales volumes of 1.8% - their highest yearly increase since July 2021.

“As we enter the ‘golden quarter’ with shopping events such Halloween and Black Friday on the horizon, retailers will be hoping for a positive end to the year, with many racing to attract consumers earlier than ever. Last year we saw retailers begin their mid-season sales in October and a ‘Black November’ could be on the cards again, signalling an eagerness by retailers to clear stock well ahead of the Christmas rush and spread out the trading period, rather than relying on the final six-week sprint to the end of the year.

“Over the next few months, it will be essential for retailers to keep a close eye on sales volumes, stock levels and competitor behaviour. Promoting too early and selling out at a discount could prove detrimental, but waiting too long to activate promotions could leave them with excess stock. It’s a fine line to walk.”