Retail sales continued to grow in August, according to the Office for National Statistics (ONS), despite consumer confidence plunging over the past month.
Sales are estimated to have risen 1% in August from a 0.7% rise in July, marking their highest levels since July 2022, the ONS reported.
Some supermarkets and clothing retailers attributed the rise to warmer weather and end-of-season sales.
Food and clothing sales saw unseasonably strong sales, the government department said, with grocery rising 1.8% and textile clothing and footwear stores up 2.9% for the period.
The amount spent online remained flat during August, rising 4.3% compared with the same time last year.
The rise in retail sales comes as consumer confidence has dropped during September ahead of the Budget and the withdrawal of winter fuel payments.
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The overall index score for consumer confidence plunged by seven points to -20 for this month, the latest GfK Consumer Confidence Barometer reported.
GfK consumer insights director Neil Bellamy noted: “Headline consumer confidence has recorded a big fall this month to -20, taking us back to a similar level seen at the beginning of this year.
“All five measures are down but there are major corrections in the outlook for our personal financial situation for the next 12 months (down nine points), our views on the general economy for the coming year (down 12 points) and the major purchase index (down 10 points).”
He added: “These three measures are key forward-looking indicators so, despite stable inflation and the prospect of further cuts in the base interest rate, this is not encouraging news for the UK’s new government.”
Tom Youlden, partner at McKinsey & Company said the next few months would be “pivotal”.
“If inflation continues to hover close to the 2% mark, consumers may start to experience a modest increase in purchasing power over the crucial golden quarter.
“But with higher energy bills on the horizon from October, many will be mindful of making discretionary purchases and continue to look for opportunities to trade down.
“Retailers will need to closely monitor where consumers are willing to make trade-offs and where they are willing to splurge – using these insights to inform product ranges, availability, pricing and promotional strategies.”
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