Warm weather boosted sales at UK clothing retailers in August

Warm weather boosted sales at UK clothing retailers in August

A week after the UK's Office for National Statistics revealed better-than-expected retail sales in July, further evidence has emerged to suggest consumer spending remains strong following the Brexit vote.

The latest Distributive Trades Survey from the Confederation of British Industry (CBI) showed retail sales volumes rose at their best levels for six months in August. 

Clothing reported a strong month for sales volumes, with a balance of +39% of clothing retailers reporting year-on-year growth in August.

Increases at footwear and leather goods retailers meant a balance of +35% recorded higher sales volumes in the month. While this was below the +44% seen in July, it was the second-best performance since February.

Clothing retailers had a particularly good month thanks to the warm weather and a weaker pound encouraging tourists to spend.

"The summer weather has brought shoppers out onto the high street with retailers reporting that sales growth has risen, outdoing expectations, although firms do expect sales growth to ease next month," says Anna Leach, CBI head of economic analysis and surveys.

"While the fall in sterling has boosted visitor numbers to the UK, it is likely to push up the price of imported goods over time which will mean households will be more likely to rein back spending on non-essentials."

The survey showed that 35% of retailers said sales volumes were up in August on a year ago, while 26% said they were down, giving a balance of +9%, the highest level since February. This is in marked contrast to July, when total retail sales volumes fell at the fastest pace in more than four years.

Growth in internet sales volumes accelerated in the year to August (+42%), up from the previous month (+23%), outstripping expectations. Broadly similar growth is expected next month.

However, the survey of 131 firms – of which 58 were retailers ­– also showed the volume of orders placed upon suppliers fell for a fifth consecutive month although retailers expect them to grow somewhat in the year to September.

Average selling prices fell for the first time since November 2015 (-5%) after rising over the first half of this year.

And while 26% of retailers placed more orders with suppliers than they did a year ago, 33% placed fewer orders – giving a balance of -7%.

The numbers tally with those from the ONS, which last week said consumer spending remained resilient in aftermath of the referendum. Its data showed growth in all sectors, with the main contribution coming from non-food stores such as department stores, textile, clothing and footwear, household goods and other stores.

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