August was a disappointing month for retail sales as macroeconomic issues slashed consumer spending, an expert said. Photo: PA

Retail sales volumes fell in the UK in August as companies grappled with supply chain issues and labor shortages.

The Office for National Statistics said retail sales volumes fell 0.9% in August, following a 2.8% drop in July – although they were 4.6% higher than their levels before the February 2020 pandemic.

“After July’s sharp drop, August was another disappointing month for retail sales as macroeconomic issues reduced consumer spending,” said Lynda Petherick, head of retail at Accenture UKI.

She said that while easing self-isolation rules, summer stays and hospitality restrictions helped maintain a healthy level of consumer spending, the continued impact of labor shortages and supply chain disruptions “took a heavy toll on the industry, in a month characterized by images of bare shelves and delayed deliveries.”

Stuart Cole, chief economist at Equiti Capital, said the numbers “will further fuel fears that the pace of Britain’s economic recovery is slowing and that the recovery in consumer demand has already peaked”.

He said the Bank of England’s unwillingness to deal with mounting inflationary pressures “could compound this reluctance to spend as households choose to tighten their belts now against the prospect of even higher prices to come. “.

“With announced tax hikes already in the works and the Chancellor expected to announce further cuts in government spending in next month’s budget, the outlook for UK consumers going forward looks increasingly uncertain.”

Food store sales volumes fell 1.2%. Perhaps this was because the further easing of hospitality restrictions meant people were spending less time at home and spending more money on eating and drinking outside.

Non-food stores recorded a 1% drop in sales volumes in August 2021, driven by declines in department stores (-3.7%) as well as stores selling items such as sports equipment and clothing. technology (-1.2%).

Companies were asked if they were able to get the materials or goods they needed in the UK in the past two weeks.

6.5% of retail businesses said they couldn’t do it. Department stores suffered the most with 18.3%, followed by clothing stores with 11.1%.

Read more: European stock markets are in a good mood despite declining UK retail sales

Another 8.9% were able to get what they needed, but had to change providers or find alternative solutions to do so. Over 22% of grocery stores reported it.

“Buyers and stores were stranded by shortages in August. Keeping the shelves full was a real battle, especially for department stores, which is one of the reasons we spent less at those stores in August. Supermarkets have fought to maintain supply chains, but the power of these retailers has enabled them to hunt down alternative suppliers so that we can continue to fill our carts, ”said Sarah Coles, personal finance analyst at Hargreaves Lansdown .

Meanwhile, Petherick said “the horse may have rushed for companies that have yet to act to secure their supply chains.”

“Fulfilling orders and securing inventory will be difficult, as many brands may find themselves short of staff during this busy time. Without meticulous planning, consumers might be forced to get creative this Christmas if retailers can’t meet their needs. “

A bright spot in the numbers was automotive fuel sales volumes, which rose 1.5% in August, and the proportion of online retail sales rose to 27.7% in August 2021 from 27.1%. in July, significantly higher than the 19.7% of February 2020 previously. the pandemic.

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