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Mixed fortunes for furniture, food and fashion as retail sales bounce back in August

20poundnotesAfter two months of falling retail sales, sales picked up again in August, although the increase was lower than in 2013.

UK retail sales were up 1.3% on a like-for-like basis compared with August 2013, when they had increased 1.8% on the preceding year, according to the British Retail Consortium-KPMG Retail Sales Monitor. Total sales were up 2.7%, against a 3.6% rise in August 2013: the best performance since January, excluding April which was distorted by the timing of Easter.
However, after declining sales in June and July, the three month average was flat.
Helen Dickinson, BRC director general said furniture sales had been driven by the housing market, fashion sales had risen at the highest rate for more than two years but food sales had continued to drop.
'August has recorded the strongest growth in retail sales since January this year, excluding Easter distortions, accelerating to 2.7%. This was driven in the main by the best growth of clothing and footwear since December 2011, indicating a higher level of consumer confidence in the economy. Retailers have pointed to the successful launch of their autumn fashion collections helped by the cooler weather, as well as a good response to marketing campaigns for back to school clothing. Furniture sales also did well as the strength of the housing market continues although not as well as in July.
'On the other hand consumers are still taking advantage of record low food inflation. The strength of the economy is not yet consistent across all areas of the country and shop prices fell in August. For retailers the challenge in these circumstances is to ensure continued investment in digital innovation, the physical retail space and job creation.'
David McCorquodale, KPMG head of retail said: 'Back to school sales and the changing of the season saw fashion retailers put in a strong performance in August. Overall, it has been a very successful summer for non-food retailers, placing them on a firm footing for the autumn/winter trading period and the run up to Christmas. However, not all sectors are seeing their sales grow. The food sector remains in a state of disruption with the share of the "big four" being challenged on many fronts after a 15-year reign. The like for like decline shows the battle is being fought via the prices on the shelves, but the war may be won by those grocers best able to adhere to brand values to retain customer loyalty.
'With autumn drawing in, the countdown to Christmas has now begun. This will be a true bellwether of consumer confidence. If shoppers feel secure enough in the future to spend, then retailers could be in for an enjoyable Christmas this year.'