LONDON-British retailers saw stronger-than-expected sales in August, the U.K.’s leading business lobby group said on Thursday, rebounding from a slump the previous month in the immediate wake of Britain’s decision to leave the European Union.
Advertisement
Motor traders reported the most significant improvement in conditions for the period, 30% of those surveyed said that sales were up while none said that sales had fallen during the survey period, giving a positive balance of 30%.
Aug 25 British retailers reported their strongest sales in six months in August, recovering much of an initial slump after Britain’s vote to leave the European Union, industry figures showed on Thursday.
The survey of 131 firms, of which 58 were retailers, showed that the volume of sales grew modestly over the year, beating expectations for a further fall this month.
The volume of orders placed with suppliers fell for a fifth consecutive month, but retailers expect them to grow somewhat in the year to September.
Year-on-year employment was again flat in the year to August, although retailers expect a small cut in headcount in September.
This means households will be more likely to “rein back” spending on nonessentials, said Anna Leach, the CBI’s head of economic analysis and surveys.
Economist Ruth Gregory at Capital Economics said the survey was “nothing to get excited about” and that the figures “still point to a slowdown in the official measure of retail sales growth after July’s strength”. Ruth Gregory at Capital Economics noted: “With labour market conditions likely to deteriorate and rising inflation set to undermine real wage growth, it would be fairly surprising if retail sales growth didn’t slow at all in the aftermath of the leave vote”. It also seems possible that retail sales could have been helped by a feel good factor from Team GB’s excellent performances in the Olympics’.
He said: ‘The concern is that the fundamentals for consumers will soften appreciably over the coming months, thereby weighing down on spending’.
Advertisement
They are forecasting a 6.5% increase in footfall for the August Bank Holiday weekend, compared to a year ago, due to the warm weather forecast and an increase in tourists due to the weak pound.
