The world’s fifth-largest economy posted some weak economic news this week, as concerns mount over the UK economy.
Retail Sales fell for a fourth consecutive month in August, whilst British businesses reported a sharp increase in recruitment difficulties over the last few weeks.
UK Retail Sales Fall Again
August saw UK retail sales fall for the fourth consecutive month. Disruption in the supply chains and labour shortages aere believed to be impacting sales. The ONS (Office of National Statistics) reported that sales fell 0.9% last month. August’s figures followed a 2.8% decline in July.
Food store sales dropped by 1.2% whilst the share of online sales increased to 27.7% last month from the 27.1% the ONS recorded in July. To put the shift towards online sales in perspective, the share of online sales before the pandemic hit the UK in February 2020, was 19.7%.
Sarah Coles, personal finance analyst at Hargreaves Lansdown, said:
“Keeping the shelves full was a real battle, especially for department stores, which is one reason why we spent less in these stores in August,” she said.
“Supermarkets had a fight on their hands to keep supply chains flowing, but the might of these retailers meant they were able to track down alternative suppliers so we could keep filling our trolleys.”
Sarah Coles
According to the ONS, 6.5% of all retail businesses said they were unable to get the materials, goods or services needed from within the UK in the last two weeks. The lack of lorry drivers, changes post-Brexit and the coronavirus have caused considerable disruption to the supply chain.
Department stores reported to be the most affected by disruption (18.2%), with clothing stores (11.1%) second.
Lynda Petherick, head of retail at Accenture UKI, said:
“Retailers will already be concerned as we head into the Golden Quarter as the horse may have bolted for businesses who haven’t already acted to sure-up their supply chains,” she added.
“Order fulfilment and securing stock will be challenging, while many brands could find themselves short-staffed over this busy time. Without meticulous planning, consumers may be forced to get creative this Christmas if retailers can’t meet their needs.”
Lynda Petherick
UK Businesses Experiencing Recruitment Difficulties
Compounding matters further for the UK economy is a difficulty in recruitment.
Official figures released on Thursday showed that British businesses are reporting a sharp rise in recruitment difficulties within the space of just a few weeks.
The Office for National Statistics (ONS) reported that 41% of companies with 10 or more staff reported greater than usual recruitment challenges in the two weeks to Sept. 5, up from 32% in early August.
The number of EU nationals employed in Britain in the three months to the end of June was 8.7% lower than before the COVID-19 pandemic, compared with a 2.4% fall in the size of the total workforce.
