UK retail sales declined 0.9% in August, and supply chain issues hit sector

Businesses saw UK retail sales in August fall 0.9%, as shoppers opted to spend more on eating out than in certain stores, figures suggest.

Retail sales volumes fell by that amount when compared with July, according to the Office for National Statistics.

Food store sales volumes suffered a 1.2% drop, and the ONS’ Jonathan Athow, deputy national statistician for economic statistics, said data suggests that “is linked to an increase in eating out following the lifting of coronavirus restrictions”.

Non-food stores reported a fall of 1%, with lower volumes of sales in department stores. But fuel sales gained 1.5% as more people continued to increase how much they travel.

Athow pointed out that the total decrease last month was not as deep as the 2.8% decline recorded in July, which was the biggest fall since January when another lockdown came in.

July did not get the same high food demand seen previously at the start of the Euros tournament.

The ONS said the performance in August was still 4.6% higher than pre- pandemic February 2020 levels.

Meanwhile, the ONS also shared research that highlighted supply chain issues some firms are grappling with.

Across businesses in the retail industry, 6.5% reported they were not able to get the materials, goods or services needed from within the UK in the last two weeks.

That compares with 7.1% across all industries. Department stores reported the largest percentage at 18.2%, followed by clothing stores at 11.1%.

The figures looked at supply between August 9 and to August 22.

Oliver Vernon-Harcourt, head of retail at Deloitte, said: “A perfect storm of labour shortages, supply chain issues and increased demand will continue to test retail leaders as we enter the Golden Quarter. Christmas will be impacted by these headwinds; there will very likely be shortages in some categories which will force consumers to make different choices.”

He added: “Retailers – particularly grocers – will have to decide which products to put on the shelves, prioritising higher-margin products where possible. Managing price increases and stock shortages will be one of the main challenges retail leaders will have to address in the coming months.”