Retail sales, Great Britain: August 2017

• In August 2017, the quantity bought (volume) in the retail sales industry increased by 1.0% compared with July 2017; with other non-food stores and non-store retailing as the main contributors to growth.

• Compared with August 2016, the quantity bought increased by 2.4%; the 52nd consecutive month of year-on-year increase in retail sales.

• Year-on-year contribution of food stores remains flat whilst there was a fall in the contribution of growth within petrol stations, showing that contributions to the overall growth came from non-essential items.

• The underlying pattern in the retail industry is one of growth, three-months on three-months the quantity bought has increased by 1.2%.

• Store prices increased across all store types on the year, with non-food stores and non-store retailing recording their highest year-on-year price growth since March 1992, at 3.2% and 3.3% respectively.

Commenting on today’s official retail figures, Kate Davies, ONS Senior Statistician said:

“Within this month’s retail sales we are seeing strong price increases across all store types compared with a year ago, reflecting wider inflationary pressures. However, we are still seeing underlying growth in sales volumes, and with strong growth in non-essential purchases as consumers continued to buy more from non-food stores.”

This bulletin presents estimates of the quantity bought (volume) and amount spent (value) in the retail industry for the period 30 July 2017 to 26 August 2017. 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 inflation). Unless otherwise stated all estimates included in this release are based on seasonally adjusted data.

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 Summary Quality and Methodology Information report.

Table 1 shows that in all measures the quantity bought (volume) and amount spent (value) in the retail industry increased. Figure 1 provides a longer-term time series of the quantity bought in the retail industry.

Looking at the longer-term picture, it shows that the quantity bought in the retail industry throughout 2010 to August 2013, was relatively flat. Across the same period the amount spent in the retail industry increased at a steady rate. From September 2013 onwards, the quantity bought in the retail industry began to increase and continued to do so until August 2016, a short period of contraction then followed, but more recent estimates show that the underlying pattern has returned to growth.

The amount spent in the retail industry can be determined by a combination of the number of goods sold multiplied by the price at which they are sold. Therefore with the quantity bought increasing and the amount spent increasing at a faster rate, it implies that prices within the retail industry are also increasing.

Figure 2 shows how average store prices (non-seasonally adjusted) have changed since 2010.

Throughout the period January 2010 to August 2013, the underlying pattern in average store prices was one of growth, thus as the amount spent in the retail industry increased and the quantity bought remained relatively flat, it can be assumed that the growth in the amount spent was a direct consequence of rising prices.

As average prices started to fall, the amount spent continued to increase and as consumers took advantage of cheaper prices the quantity bought began to increase. Prices began to rise again in the second half of 2016 and this coincides with the short period of contraction that we saw in the quantity bought. However, the underlying pattern has returned to growth despite rising prices as seen in Figures 1 and 2.

Table 2 provides a summary of the year-on-year growth rates in the quantity bought, amount spent and average store prices for all sectors.

In August 2017, average store prices increased across all store types compared with August 2016, with non-food stores and non-store retailing recording their highest year-on-year price growth since March 1992, at 3.2% and 3.3% respectively.

Consistent with the Consumer Prices Index (CPI), rising prices in clothing stores and petrol stations provided the main contribution to store price inflation, with average prices in petrol stations increasing by 5.0% and in textile, clothing and footwear stores increasing by 4.2%. Despite the price increases in clothing stores, likely to be as a result of sales promotions ending, consumers continued to buy more from these stores and feedback from businesses suggests that footwear stores fared well with back-to-school items this August.

Looking at the monthly growth contributions for August 2017, non-food stores and non-store retailing were the primary drivers of the overall growth for both value and volume sales (Figure 3).

The quantity bought within food stores remained flat on the month, whereas petrol stations showed increases in both the amount spent and quantity bought, at 0.2% and 0.1% respectively.

The quantity bought in non-store retailing was the main contributor to growth on the year, followed closely by non-food stores. The contribution of food stores remained flat whilst there was a fall in the contribution of growth within petrol stations, showing that contributions to the overall growth came from non-essential items (Figure 4).

The amount spent in retail shows positive contributions to growth across all sectors, with a notable increase in contributions to growth from non-food stores; contributing the largest amount at 2.6%, a consequence of rising prices in these stores.

Internet sales are estimates of how much was spent online through retailers across all store types in Great Britain.

In August 2017:

• average weekly spending online was £1.1 billion; an increase of 15.6% compared with August 2016
• the amount spent (value) online accounted for 16.4% of all retail spending, excluding automotive fuel, compared with 15.0% in August 2016

The only international estimate of retail sales available for August 2017 was published by the US Census Bureau on 15 September 2017. In its advanced retail trade estimates for August 2017 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 across the European Union on 5 September 2017 for July 2017. This shows the seasonally adjusted volume of retail trade in both the euro area (EA19) and EU28 when compared with June 2017.

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 will be incorporated into the estimates for September 2017 to be published on 19 October 2017. This is to allow for further quality assurance to be undertaken.