Retail sales bounce back 0.5% as summer draws to a close

August saw a late-summer boost in retail sales, with volumes rebounding from July’s fall. While the stronger performance offers some encouragement for retailers, the wider spending environment remains challenging.

The Bank of England signalling that further rate hikes could be on the table, alongside inflation picking up again, is putting further pressure on disposable incomes and taking the wind out of the sails of consumer confidence, leaving shoppers with less appetite to spend.

Meanwhile, with the summer now in the rear-view mirror, retailers are heading into the autumn trading period with little room for manoeuvre. Higher operating and employment costs, elevated energy and fuel prices and continued global uncertainty are piling on the pressure.

For businesses, the next few months will be about keeping their heads above water while preparing for the opportunities that the next trading period can bring. Building resilience into supply chains, managing currency exposure through robust hedging strategies and maintaining access to flexible finance can all help retailers stay on the front foot.