UK retail sales hit high, but grocery sector lags for third consecutive month

British retailers recorded the strongest growth since January 2014, up 2.7 per cent against a 3.6 per cent rise in August 2013, according to the BRC-KPMG August Sales Monitor.

Overall, sales were up 1.3 per cent on a like-for-like basis from August 2013, driven predominantly by the clothing and footwear sectors which reported the fastest growth rate since December 2011.

However, the food sector suffered its third consecutive month of declining sales, a like-for-like drop of 3.6 per cent.

The figures led David McCorquodale, head of retail at KPMG, suggest that the battle between the 'big four' supermarkets shows no signs of ending.

"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. “

Meanwhile, Helen Dickinson, director general, British Retail Consortium (BRC), said the non-food results were indicative of retailers launching of their autumn fashion collections as well as a strong consumer 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,” she added.

“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.”

Additionally, online sales of non-food products in the UK grew 19.8 per cent in August versus a year earlier - the highest online growth on record.

McCorquodale added that the strong results places non-food retailers on a firm footing for the Christmas trading period.

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