Belfast Telegraph

Food sales dip after heatwave boost

Shoppers tightened their belts in August as they spent £1 billion less after a barbecue boost had set tills ringing in July.

Retail sales volumes dropped by 0.9% between July and August as the amount spent dipped from £27.9 billion to £26.9 billion, according to the Office for National Statistics.

The main decline came in the food sector, where sales fell 2.7%, reversing a 2.7% gain seen in July that was spurred on by the heatwave.

Overall, sales volumes were still up 2.1% year-on-year, continuing a pattern of growth that started as the bitterly cold spring came to an end in April.

Non-food stores also performed better month-on-month, improving by 0.4% after sliding in July.

The fall dashed expectations for a small rise and suggests that the feel-good summer spending boost - fuelled by the birth of Prince George and British sporting successes in tennis, cricket and rugby - was short-lived.

It saw retail sales volumes add 1.1% in July, but the new figures showed the surge did not last beyond the month.

The August slump in food sales will have hurt supermarkets and comes after a warning from Asda that there was likely to be a hangover following the previous spending splurge.

Elsewhere, fashion retailers did better as sales volumes across textile, clothing and footwear shops climbed 1.1% and department stores rose 1% month-on-month.

Meanwhile, internet and mail order retailing saw exceptionally high growth of 30.4% compared to the same period last year, when sales were hit as consumers watched the Olympics and Paralympics.

Chris Williamson, chief economist at Markit, said: "Consumers pulled back on their retail spending after a spending spree in July, but retail sales are still trending higher at the fastest rate since mid-2007, meaning the economy looks set to have grown strongly in the third quarter."

David Kern, chief economist at the British Chambers of Commerce (BCC), said: "Despite the fall in August, the long-term trend in retail sales is positive."