Retailers look on sunny side as holidaymakers splash out
Sales of health and beauty products help high street stores bounce back after a disappointing start to the summer
Britain’s retailers have received a boost from consumers making themselves beach-ready by increasing their spending on skincare and makeup before their summer holidays, despite the cost of living crisis.
The British Retail Consortium (BRC) said sales of health and beauty products helped drive up spending on the high street as shoppers made the most of brief spells of sunshine in August, although squeezed consumers were holding back elsewhere.
Separate figures from Barclays showed that pharmacy and health and beauty stores benefited from pre-holiday purchases, with a 5.2% rise in sales likely due to holidaymakers buying suncream and other toiletries for trips away.
The BRC said total sales rose by 4.1% compared with a year earlier, above the annual average growth rate, to recover from a disappointing month in July. However, much of the rise was the result of high inflation pushing up the value of goods being sold, masking weaker sales volumes.
Spending on skincare, makeup and perfume products had helped retailers enjoy the strongest month for non-food sales since February, while the progress of the England women’s football team to the World Cup final had bolstered sales of food and drink.
The figures come amid a bumper summer season for airlines, with holidaymakers eager to travel abroad despite the cost of living squeeze. Ryanair said on Monday it had set a new all-time traffic record for August, typically its busiest month, after carrying 12% more passengers than in the same month a year ago.
But with households under pressure from the rising cost of living and soaring borrowing costs, retailers said consumers were cutting down on clothing and footwear, with households delaying purchases of children’s uniforms and other back-to-school goods until the last minute.
Barclays said consumer card spending – which includes money spent in shops but also on travel, hospitality and other services – slowed in August thanks to wet weather and households tightening their belts.
The bank, which processes almost half of UK credit and debit card transactions, said spending rose by 2.8% year on year in August – significantly below the latest inflation figure of 6.8%.
Spending on essentials rose by just 1%, the lowest uplift since April 2020 during the first wave of the Covid pandemic. This was largely due to a sharp fall in fuel sales and a weaker month for sales growth in supermarkets.
Although wet weather hit high street shops, pubs and restaurants, Barclays recorded a surge in cinema ticket sales as consumers rushed to watch the summer blockbuster hits, Barbie and Oppenheimer. There was a 101% rise in spending compared with the same month a year earlier.
Helen Dickinson, the chief executive of the BRC, said easing inflation would help consumers but that higher interest rates and expensive winter energy bills could create renewed pressure in the months ahead.
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