It’s been a summer of good news as the economy gently emerged from the doldrums. But with all this enthusiasm about ‘recovery’, are we getting ahead of ourselves? A report by the Office for National Statistics has suggested month-on-month retail sales including fuel dropped by 0.9% in August, the figure’s biggest monthly fall since October last year.
It’s a bit of a shock for analysts, who had expected a rise of 0.4%, particularly after a spate of good news from high street stalwarts such as Debenhams, French Connection and Superdry – and after sales rose by 1.1% in July.
To be fair, August sales were still 2.1% higher than during the same period last year, when everyone was glued to their sofas during the Olympics (despite the theory that we were all supposed to be in celebratory moods and therefore spending with abandon).
Food was by far the biggest faller – it dropped by 2.7% in August, which completely reversed its gain in July. That suggests barbecue season came to an abrupt halt, despite the hot weather.
The figures throw comments last week by Morrisons chief executive Dalton Philips into sharp relief. When the supermarket posted its results on Thursday, Philips pointed out that most consumers are still ‘one pay cheque away from bankruptcy’.
‘A number of leading indicators are suggesting the economy is on the up but that’s still got to filter through to consumers’ wages,’ he added.
‘Inflation is still far outstripping wages.’
Mind you - it doesn't necessarily apply to all market sectors. We're used to good results from Asos, the online fashion retailer, but this is just ridiculous: the company announced sales had risen by 47% during the three months to the end of August, pushing full-year revenue expectations to £769m, which would be a 39% rise on last year.
Although sales in the UK rose 49%, foreign markets made a big contribution to its success: sales in Europe increased by 73%, while the rest of the world (including Australia) rose by 26%.
Clearly, things continue to go well for online retailers - and there’s no doubt that conditions for consumers are starting to get better. But until payrises (currently averaging at 1%) begin to improve, consumers won’t be able to begin the Great Spending Spree everyone is waiting for.