UK retailers extend losing streak in August

People shop at Selfridges department store on Oxford Street, as coronavirus disease (COVID-19) restrictions ease, in London, Britain April 12, 2021. REUTERS / Henry Nicholls / File Photo

LONDON, Sept. 17 (Reuters) – UK retail sales fell unexpectedly again last month in what is now a record-breaking string of monthly declines, official data showed on Friday, adding to concerns over the economic recovery. that sales volumes remain well above pre-pandemic levels.

Sales have fallen steadily since peaking in April shortly after COVID-19 restrictions were lifted in stores.

Statisticians said part of August’s 0.9% drop appeared to reflect a shift in spending at supermarkets in favor of restaurants, where restrictions came to an end more recently.

But stores have also reported difficulties in the supply chain, and the drop comes on top of signs that Britain’s recovery is collapsing after a spate of cases of the Delta coronavirus variant in July.

“August’s retail sales data provides further evidence that the recovery in consumer spending lost considerable momentum in the third quarter and should cause markets to question whether (the Bank of England’s) MPC will be really able to raise the bank rate as early as February, “Samuel Tombs of Pantheon Macroeconomics said.

While most economists don’t expect the BoE to start tightening policy until the end of next year, financial markets estimate the chance of a first rate hike in February at nearly 60%. .

But the pound sterling barely weakened against the US dollar after the data, which fell below all expectations in a Reuters poll of economists.

Sales for previous months were also revised downward, resulting in a fourth consecutive monthly decline, the longest since monthly records began in 1996, the Office for National Statistics said.

Sales volumes are still 4.6% above their February 2020 level, before being affected for the first time by the COVID-19 pandemic, but unchanged from their August 2020 level.

Many retailers are also struggling to keep their shelves fully stocked due to supply chain bottlenecks caused by a mix of global shortages in the wake of the pandemic and a shortage of truck drivers in Britain.

Just under 7% of retailers said they were unable to get all the inventory and other goods and services they needed in August – like businesses in the wider economy – with a figure rising to 18 % of department stores, ONS said.

Clothing and footwear sales were the only spending category to increase in August.

Retail sales fell 2.8% in July, which stores attributed to bad weather and some shoppers preferring to follow England’s success in the Euro 2020 football tournament earlier this month, according to the ONS.

UK retail sales

Reporting by David Milliken, editing by Andy Bruce and Timothy Heritage

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