UK high street spending dropped in August, leisure spending increased

High street spending in the UK dropped in August as consumers took a break from shopping amid hot weather, opting to eat and drink out instead.

According to figures from the British Retail Consortium/KPMG, on a like-for-like basis sales dropped 0.9% in August from the previous year, compared with a 1.1% increase in July.


Excluding distortions caused by the timing of public holidays it was the weakest reading since September 2014.

The greatest impact on spending in August was the warm weather and timing of the new school term.

“A month of extraordinary achievement for Team GB certainly produced a feel-good effect and consumer confidence was up on July, but that generally didn’t translate into extra sales,” said Helen Dickinson, the BRC’s chief executive.

“Consumers were enticed towards leisure and outdoor activities rather than shopping, although food did post its strongest performance in more than two years, fuelled by demand for picnic, barbeque supplies and celebratory drinks.”

The warm weather did boost sales of barbecues and wine, while watches and jewellery was the strongest performing category for a second month – as tourists took advantage of the weak pound for big ticket jewellry purchases.

EU referendum has had little impact so far on UK consumer spending, says Dickenson.

Dickinson added: “As we’ve seen in the last couple of months, data portending the health of the economy paint a volatile picture. The fact is that so far little has directly changed for the UK’s consumers as a result of the referendum, so it’s the pre-existing market dynamics that are still driving sales.”

Spending in pubs and restaurants soared in August

According to separate figures by Barclaycard, spending in pubs rose 13.3% on the year, spending in restaurants increased 12.7% and cinema spending was up 14.6% on the year.

A poll of 1,660 people revealed that only 58% were confident in their household finances, down from an average of 71% last year.

“Consumer spending has continued to grow after the EU referendum, with August being a particular stand-out month considering confidence in household finances remains low compared to levels seen last year,” said Paul Lockstone, managing director at Barclaycard.

“Confidence continues to be shaky as the wider economic picture remains uncertain, suggesting it’s too soon to tell if this lift in spending will last once everyone’s holiday tans have faded.”