Eating out doesn’t help out retailers in August

Danni Hewson
17 September 2021
  • Retail sales down 0.9% in August
  • Food sales have dropped as people flock to bars and restaurants
  • 6.5% of all retail business have struggled to get goods in the last two weeks

Danni Hewson, AJ Bell financial analyst, comments on the latest ONS retail figures:

“August is often dubbed the silly season with many sectors slowing down as the country enjoys a bit of a holiday.  After months of restrictions the data suggest that consumers took every opportunity to get out and socialise and that’s had a knock on to retail sales.  People needed to buy less food and drink in store because they were enjoying having someone else do the cooking, restaurants and takeaways profited as did forecourts as people filled up to get out, although fuel sales are still struggling to get back to pre-pandemic levels.

“Non-food sales also tumbled despite that back-to-school push and retailers will be weighing up whether that fall was down to consumers deciding to spend their pennies elsewhere or because goods simply weren’t available.  Department stores and clothing emporiums experienced the greatest difficulty in getting hold of goods but supply is an issue across the board.  Food stores in particular have had to shop about to get the products they require, a quick look on supermarket shelves shows some shopper favourites have been replaced with unfamiliar brands and both Morrisons and the Co-op have warned that supply issues and driver shortages are bringing price rises.

“Whilst rising prices will be off-putting to consumers, not having goods on shelves at all presents retailers with a real challenge as we head into that golden quarter.  Christmas 2020 was a huge disappointment for many families and for many retailers and as long as restrictions don’t resurface, this festive season could be a record breaker.  Pent up demand and a savings cushion for at least some families will result in a willingness to pay a little more for the goods they want wrapped under the tree and spread groaning on the table.  But retailers know there’s a sweet spot and whilst they’ll be anxious to make up for lost sales, they’ll also find they’ve little opportunity to discount goods because the wiggle room has thinned.”

Danni Hewson
Financial Analyst

Danni spent more than 19 years at the BBC, presenting and reporting on business news across a variety of programmes – including BBC Breakfast, BBC News Channel, BBC Look North and latterly Radio 5 Live’s flagship business programme ‘Wake up to Money’. She is now responsible for producing analysis and commentary across a broad range of subjects at AJ Bell, from financial markets, to economics and personal finance.

Contact details

Mobile: 07593 451 437

Follow us: