The British Retail Consortium (BRC) and KPMG said on Tuesday that retail sales “flatlined” in August.
The 12-month average dropped to a new low of only 0.4%, the report shows.
The report said that with a budgetary Spending Review, the Brexit deadline approaching and a potential general election, the only thing that is certain is additional uncertainty.
“Greater economic and political uncertainty has driven down consumer demand,” Helen Dickinson OBE, Chief Executive at the British Retail Consortium, said in the report.
The report comes just a week after Boris Johnson asked the Queen to suspend parliament ahead of the extended Brexit deadline. The move limits MPs’ ability to block a no-deal departure from the European Union, throwing the future of the nation into further uncertainty.
“While the summer weather gave a small boost to food sales, this was cancelled out by a drop in non-food sales,” Helen Dickinson OBE continued.
“Summer discounting and poor footfall have hit in-store sales particularly hard. If the Government wants to avoid seeing further store closures and job losses on the UK high street, they must take action. Last month, fifty retail CEOs wrote to the Chancellor demanding he fix the broken business rates system, allowing businesses to fund vital investment during this unprecedented period of transformation.”
Indeed, over the past year, several high street retailers have had to battle against the difficult trading conditions to hit the UK high street. Job cuts and store closures have been widely reported by retailers struggling for survival.
“August proved to be yet another incredibly disappointing month for retail, with like-for-like sales down 0.5% and total sales flat-lining at zero. It’s clear that for much of the retail market, efforts are being focussed on preservation, not growth, in this adverse and uncertain climate,” Paul Martin, UK Retail Partner, KPMG, added in the report.
Broadly speaking, fashion sales were boosted by back-to-school promotions for children’s fashion and footwear.
Online sales outperformed the high street, according to the report, but with a growth as little as 2.2%, showing that even this channel has taken a hit.
Food and grocery sales did, however, see year on year growth in August, driven by the Bank Holiday heatwave.