Retail sales, Great Britain: August 2018

• In August 2018, the quantity bought increased by 0.3% when compared with the previous month, with increases across all sectors except food, clothing and petrol.

• The month-on-month growth rate in the quantity bought in food stores at negative 0.6% and clothing stores at negative 1.9% was offset by strong growth in other non-food stores at 2.8% and household goods stores at 4.5%.

• In the three months to August, the quantity bought increased by 2% when compared with the previous three months, with continued growth across all sectors.

• The last three months of summer from June to August 2018 saw an increase in the quantity bought at 3.4%, with food and household goods stores doing well in the warm weather when compared with the previous summer, while non-store retailing continued to show strong growth.

• Spending online continued to increase to reach a new record proportion of all retailing at 18.2%; with strong growth in department stores also reaching a record proportion at 18.4%.

Commenting on today’s retail sales figures, Office for National Statistics senior statistician, Rhian Murphy said:

“Retail sales remained strong in the three months to August, with continued growth across all sectors. Food and household goods stores particularly benefitted from the warm weather when compared with last summer.

“The figures for the month of August were a little more mixed, with food sales falling after strong sales earlier in the summer and clothing sales declining following a strong July, as suggested by clothing retailers. On the other hand, household goods grew strongly.”

This bulletin presents estimates of the quantity bought (volume) and amount spent (value) in the retail industry for the four-week period 29 July 2018 to 25 August 2018.

Unless otherwise stated, the estimates in this release are seasonally adjusted.

The Retail Sales Index (RSI) measures the value and volume of retail sales in Great Britain on a monthly basis. Data are collected from businesses in the retail industry and the survey’s results are used to produce seasonally adjusted monthly, quarterly and annual estimates of output in the retail industry at current price and at chained volume measures (removing the effect of price changes).

The RSI is an important economic indicator and one of the earliest short-term measures of economic activity. It is used in the compilation of the national accounts and widely used by private and public sector institutions, particularly by the Bank of England and Her Majesty’s Treasury to assist in informed decision- and policy-making.

Summary information can be found in the RSI Quality and Methodology Information report.

In August 2018, both the amount spent (value) and quantity bought (volume) showed growth across all measures (Table 1). When compared with the previous month, the amount spent increased by 0.6% and the quantity bought increased by 0.3%.

When compared with the previous three months, June to August increased at a faster rate for both the amount spent at 2.4% and the quantity bought at 2.0%.

When compared with a year earlier, August showed strong growth at 5.6% for the amount spent and 3.3% for the quantity bought. However, looking at growth rates over time, along with movements in the average store price, demonstrates a fuller picture of the year-on-year growth (Figure 1).

Looking at the year-on-year growth rates in the quantity bought from August 2016 to August 2018, we see strong growth in October 2016 at 7.3% as store prices continued to fall. However, a sharp slowdown in the quantity bought followed this peak as store prices began to rise steadily from November 2016.

As rising store prices reach 3.1% in March 2017, we see a general slowdown in the quantity bought, slowing to a flat October 2017. As prices slow to around 2.0% growth from March 2018, the year-on-year growth in the quantity bought increased to 4.0% in May 2017 and has hovered between 3.0% to 4.0% since, as store prices stabilise.

In August 2018, all four main sectors contributed positively to the growth in both quantity bought and amount spent at 3.3 and 5.6 percentage points respectively.

The main contribution to the amount spent came from food stores at 1.8 percentage points, whereas the main contribution to the quantity of goods bought came from non-store retailing at 1.2 percentage points.

While both value and volume increased for petrol sales, the cost of fuel in August increased by 11.3% compared with August 2017. The volume of petrol sold increased by 0.2 percentage points, though not as drastically as the amount spent at 1.3 percentage points.

Food stores was the only negative contributor towards the overall growth in the amount spent and quantity bought with both decreasing by 0.2 percentage points.

The amount spent at petrol stations made a positive contribution of 0.1 percentage points but the quantity bought had no contribution on the month. Similarly, non-store retailing provided no contribution for both the amount spent and quantity bought.

In contrast, non-food stores provided the largest positive contribution on the month, with the amount spent increasing by 0.7 percentage points and the quantity bought by 0.5 percentage points. Household goods stores was the main driver to the growth seen within non-food stores (Table 2).

During the summer of 2018 (June, July and August) the quantity bought showed strong growth from the previous year at 3.4%, while growth to June to August 2017 was slower at 2.1%.

Non-store retailing continued to show strong growth, with the largest summer-on-summer growth in the quantity bought at 12.8%. Textile, clothing and footwear stores was the only sector to report a fall in growth at negative 0.4%, when compared with the strong growth witnessed in the previous summer at 3.9%.

Household goods stores also reported strong growth during the summer of 5.8% compared with a fall in the previous year, with anecdotal evidence from retailers suggesting that the FIFA World Cup had boosted sales of televisions alongside the positive impact of the warm weather. Food sales also did well with the good weather when compared with the previous summer, with a growth of 3.2% in comparison with a fall of 0.7% in summer 2017.

Effect of the warm weather on retail sales

Feedback from retailers suggested that the sustained warm weather seen during the summer had increased consumer spending. The Met Office also reported that overall this summer was provisionally the equal-warmest on record for the UK. As displayed in Figure 4, the summer of 2018 also saw considerably less rainfall and longer periods of sunshine than 2017.

Anecdotal evidence from a range of sectors supported the notion that the warm weather had positively influenced consumers to spend during this period. Food stores reported that the warm weather had increased sales in both food and alcohol, whilst the household goods sector provided evidence that the warm weather had boosted sales as consumers spent time in their gardens and completing DIY. Petrol stations also provided feedback that the improved weather conditions had contributed to the growth in their sector as consumers filled up before embarking on day trips and holidays to enjoy the warm weather.

All main sectors contributed positively to the growth in retail sales during the summer of 2018 when compared with the summer of 2017 (Figure 5). Food stores contributed most to the growth reported in both the amount spent and the quantity bought, with retailers within the sector commenting on strong sales linked to the good weather and a further boost due to the FIFA World Cup, which ran from 14 June to 15 July.

Table 3 shows month-on-month and year-on-year growth rates for online retailing, by sector, in addition to the proportion of online sales to all retail sales. The percentage weights indicate where money is spent online.

Internet sales increased by 14.2% for the amount spent in August 2018 when compared with August 2017, with all sectors showing strong year-on-year growth.

Department stores continued to show strong online sales on the year, with an increase of 26.1%, resulting in a new record proportion of online retailing at 18.4%.

The month-on-month picture was also one of growth. Non-food stores reported growth of 0.7%, with strong growth in household goods stores (10.2%) offsetting the falls reported in food stores, textile, clothing and footwear stores, and other stores.

Online sales as a total of all retailing remained at 18.2%, maintaining the record proportion of total retailing reported in July.

The only international estimate of retail sales available for August 2018 was published by the US Census Bureau on 14 September 2018. In its advanced monthly sales for retail and food services, June 2018 (PDF, 750KB) they include the amount spent in the US retail industry, including motor vehicles and parts and food services.

Eurostat also published their latest estimates of the Volume of retail trade (PDF, 505KB) across the European Union on 5 September 2018 for July 2018. This shows the seasonally adjusted volume of retail trade in both the euro area (EA19) and EU28 when compared with June 2018.

Data for Northern Ireland are published by the Northern Ireland Statistics and Research Agency (NISRA).

It should be noted that accurate comparisons cannot be made against these or other international statistics due to a variety of reasons, including differences in methodology.

Our Monthly Business Survey (MBS) for retail sales measures output from the retail industry in Great Britain. It samples 5,000 businesses, with all businesses employing over 100 people or with an annual turnover of more than £60 million receiving an online questionnaire every month.

Further qualitative data or information and summary tables can be found in the attached datasets. This includes data on:

• response rates

• standard errors

• revision triangle

• distribution analysis

The Retail sales Quality and Methodology Information report contains important information on:

• the strengths and limitations of the data and how it compares with related data

• uses and users of the data

• how the output was created

• the quality of the output including the accuracy of the data

The results of the seasonal adjustment review have been incorporated into the estimates for this release.

We have published an article Comparing “bricks and mortar” store sales with online retail sales: August 2018, using the latest RSI data.