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Retail moved further online in August

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Retail sales continued their inexorable shift online in August, when almost a quarter of UK transactions took place over the internet, new analysis from the British Retail Consortium suggests.

Some 23.2% of non-food sales took place via ecommerce last month, says the BRC-KPMG Retail Sales Monitor for August 2018, up from 21.4% a year earlier. The rise in online’s share of the retail market came as the overall retail market showed anaemic growth. According to the BRC analysis, online sales of non-food products grew by 7.5% in August, compared to the same time last year – but below the three-month trend of 7.9%, while total UK retail sales, grew below trend at 1.3%, or by 0.2% on a like-for-like (LFL) basis. In-store, sales of non-food items fell by 2.1% in total and 3.5% LFL.

Helen Dickinson, chief executive of the BRC, said: “The trend of weak retail sales growth in 2018 showed little sign of abating as the summer came to a close this August. The continued pressure on people’s disposable income has meant that some shoppers are increasingly less able to spend on the more discretionary non-food items such as clothing and footwear.

“And it’s not only shoppers who are feeling the pinch. Retailers are under significant pressure with rising costs contributing to a difficult trading environment. The disproportionate burden of business rates is not helping matters. The government must show more urgency of action and freeze rates for a two-year period to allow for a comprehensive reform of the system in order to avoid further yet more store closures and job losses.”

OVerall, non-food sales declined while food sales were driven by inflation and the hot weather. Although sales of home and large ticket items improved towards the end of the month, the BRC said overall spending was “constrained”.

Don Williams, UK retail partner at KPMG, said: “Overall retail spending held up in August but only just. Whilst any growth is welcome in the current enviornment, structural changes within the industry continue and there is clearly diverging performance across categories and retail business models. Retailers really need to drive their repositioning, restructuring and transformation programmes with ever increasing energy and urgency. Despite temperatures cooling off, the summer sunshine continued to fuel grocery sales. Elsewhere the prospect of returning to school boosted sales of children’s clothes and computers, although stationery appeared overlooked for the time of year.”

Image: Fotolia

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