UK retail sales fall more than expected in August

Retail sales fell in August as UK consumers struggled with soaring prices and high energy costs, heightening the risk of a recession.

The quantity of goods bought in the UK fell 1.6 per cent between July and August, reversing the small expansion in the previous month, according to data published on Friday by the Office for National Statistics.

This was a larger drop than the 0.5 per cent contraction forecast by economists polled by Reuters.

The ONS said that “rising prices and cost of living” were affecting sales volumes.

The figures highlight how high inflation is hitting consumers and the wider economy. The £150bn government’s support energy package announced earlier in the month is expected to limit the blow from the recent surge in gas prices, but it does not dispel a possible recession.

All main sectors fell during the month.

Non-food stores’ sales volumes fell 1.9 per cent, with department stores registering a 2.7 per cent contraction, household goods stores were down 1.1 per cent and clothing fell 0.6 per cent.

Online sales and fuel were down 2.6 per cent and 1.7 per cent respectively. Food stores sales fell 0.8 per cent.

In the three months to August, the volume of retail sales was 1.1 per cent below the previous three months.

Lynda Petherick, retail lead at the consultancy Accenture, said that “with a difficult winter to come, it will come as a worry to retailers that shoppers have already reined in their spending despite the hot summer”.