British Retail Sales were up 2.4 percent in August, according to the latest figures from the British Retail Consortium-KPMG Sales Monitor – the greatest level of growth since April and almost a full percentage point higher than the 1.4 percent growth in sales recorded in July. Analysts say that the increase can be attributed to higher levels of consumer spending on fall apparel, on homewares, and related to children’s return to school, including on children’s apparel and school supplies.

The question remains whether sales growth can be sustained. In the UK, retailers have been struggling with the devaluation of the pound since Brexit and consumer spending has come under mounting pressure due to inflation. Analysts actually predicted that sales will begin to shrink over the course of the next few months, largely because of inflation pressures.

“Stark challenges lurk around the corner for the retail industry. Purchasing decisions are very much dictated by a shrinking pool of discretionary consumer spend, with the amount of money in people’s pockets set to be dented by inflation and statutory rises in employee pension contributions in a few months’ time,” Helen Dickinson, the chief executive of the BRC, told the Independent earlier this month. “These figures tell a less positive story about the health of consumer spending than it might seem at first glance.”

So, what can be done to relieve pressure on UK retail sales? Analysts say that securing a tariff-free trade deal with the European Union in Brexit negotiations will be key to helping facilitate the sustained growth of retail by helping to keep costs down, ensuring that there are still affordable quality products available in the UK. If such a deal isn’t obtained, tariffs will only put more strain on the sector, likely driving down sales and growth.

Sources:

http://www.independent.co.uk/news/business/news/uk-retail-sales-august-rise-consumer-secotr-stress-brexit-inflation-rise-british-retail-consortium-a7929106.html

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