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Health and beauty spending boosts UK retail sales in August

By Nithya Bose in UK Business & Employment News, posted September 5, 2023

UK Retail sales boosted in August, driven by increased spending on health and beauty products.

According to data from the British Retail Consortium (BRC) and KPMG, non-food item sales had their best month since February.

However, the clothing and footwear sectors reported weaker growth.

The delay in purchasing school uniforms was a contributing factor, the BRC noted.

Overall, retail sales value in August grew by 4.1 percent compared to the previous year.

This uptick was due to consumers' improved confidence during the month.

However, rising prices, with an annual rate of 6.8 percent in July, may have led to consumers buying fewer items but spending more.

Paul Martin, UK head of retail at KPMG, said this recovery would be a “relief” for many retailers.

The health, beauty, food, and drink categories performed strongly.

Consumers took advantage of brief sunshine during the summer holidays in physical stores and online.

Although lower than recent highs, inflation continues to influence shoppers' behavior.

Consumers remain price-conscious, actively seeking good deals to maximize their spending.

As a result, retailers are expected to face increased competition and pressure to attract customers.

Helen Dickinson, CEO of the BRC, said: "The sales figures reflected the improvement in consumer confidence in August, and retailers hope this general upwards trend will carry on.”

However, she warned high interest rates and rising winter energy bills could lead households to adopt cautious spending habits in the coming months.

Retailers are responding by offering value to consumers, expanding budget-friendly product ranges, and finding cost-cutting opportunities.

On the other hand, Barclaycard reported a less optimistic outlook.

Card spending grew at a slower rate of 2.8 percent year-on-year in August, compared to July's four percent growth.

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Rainy weather dampened high street sales.

Huge surge in cinema spending

But the entertainment sector was boosted due to a 101 percent surge in cinema spending, driven by blockbuster movies like Barbie and Oppenheimer.

Esme Harwood, director at Barclays, said: "The rainy weather impacted high street and hospitality venues in August, but Brits were still keen to spend on memorable summer experiences.

"The huge box office success of Barbie and Oppenheimer meant entertainment enjoyed another strong month, while holidays abroad boosted international travel and pharmacy, health & beauty stores

Additionally, consumers were noticing "skimpflation," a reduction in premium ingredients in certain food and drink products.

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