Department stores and online shopping drive rebound in UK retail sales

Danni Hewson, head of financial analysis at AJ Bell, believes the UK heatwaves helped retail sales after a 0.5 per cent increase in August.

She said: “The weather is often cited as the cause of falling retail sales, whether it’s too hot or too wet for people to venture out, or that the stuff in the shops is out of kilter with the forecast, but this great British summer has been somewhat kinder to the sector.

“The long days of sunshine have provided people with the kind of certainty that’s allowed them to plan BBQs and garden parties, with many of those spent jostling for position in front of the night’s sporting action.

“England’s decent run at the World Cup didn’t end exactly how fans would have liked, but it lasted long enough to boost supermarkets and off licenses as households stocked up on snacks and drinks to offer a bit of distraction when the nerves set in.

“The hot temperatures lasted long enough that people felt justified in splashing out on extra fans or air conditioning units. Smart sales tactics, especially from online retailers, tempted some of us to add a bit of freshness to our summer wardrobes.

“But those discounts shine a light on a sector that is still under significant pressure and the gap between retailers doing well and those falling further behind is likely to be exacerbated in the run-up to Christmas as budget pressures begin to increase.

“After our last brush with inflation, people have stayed attuned to every inflationary jump. They’re hunting out value and changing behaviour to make their cash stretch as far as it can.

“The uptick in fuel prices over the past couple of months has led to people limiting their journeys, putting off filling up their tanks in the hopes the price at the pump will eventually fall, although the direction of travel at the moment is up.

“Retailers will need to walk a fine line between offering deals to tempt in customers whilst trying to protect the slimmest of margins and many have already turned to AI to help them find that sweet spot.”