However, volumes were up by 0.3% in the three months to August compared with the previous three months, and were 4.6% higher than their pre-Covid-19 pandemic February 2020 levels.

Non-food stores as a whole saw monthly sales volumes fall by 1% in August 2021 and were 0.4% below their pre-pandemic levels in February 2020. Within the segment, clothing stores were the only sector to show an increase over the previous month, with sales volumes up 0.7%.

Meanwhile, the proportion of retail sales online rose to 27.7% in August from 27.1% in July, substantially higher than the 19.7% in February 2020 before the pandemic.

Supply chain disruption

As the sector continues to navigate supply chain disruptions, the ONS says looking at the businesses common between the Retail Sales Inquiry and the Business Insights and Conditions Survey (BICS) during the two weeks from 9 August to 22 August 2021, businesses which had not permanently ceased trading were asked if they were able to get the materials or goods they needed from within the UK in the last two weeks.

Across businesses in the retail industry, 6.5% reported they were not able to get the materials, goods or services needed from within the UK in the last two weeks. This compares with 7.1% across all industries. Department stores reported the largest percentage at 18.2%, followed by clothing stores at 11.1%.

Another 8.9% of businesses in the retail industry reported they were able to get the materials, goods or services they needed from within the UK in the last two weeks, but had to change suppliers or find alternative solutions. Over 22% of food stores reported this, followed by 18.8% of fuel stores and 11.1% of clothing stores.

Another underwhelming month

Lynda Petherick, head of retail for Accenture UK and Ireland, notes after July’s sharp dip, August was another underwhelming month for retail sales as macro issues put a dent in consumer spending.

She said: “The easing of self-isolation rules, summer staycations and further easing of hospitality restrictions helped maintain a healthy level of consumer spending. However, the continued impact of labour shortages and supply chain disruption weighed heavy on the sector, in a month that was characterised by images of bare shop shelves and delayed deliveries.”

She added: “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. 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.”

Meanwhile, Melissa Minkow, retail industry lead at CI&T pointed out the fall in retail sales during the month came despite the anticipated bump from the back-to-school season and more workers returning to the office.

She explained: “In part, this is due to the toll that supply chain difficulties are taking on retailers as they struggle to keep their shelves stocked. An increase in online sales to 27.7%, which is substantially higher than the 19.7% seen in February 2020, also indicated that many shoppers are happy to continue the pandemic trend of online buying.”

Minkow added: “As we enter a busier season for retail, with the holiday shopping on the horizon, retailers must ensure they’re well equipped to manage spikes in demand despite potential shortages and holdups. With the new variant causing concerns, and colder autumn weather on the way, retailers must also be prepared for potential future masking restriction, as well as changes to store capacity.”

She warned: “Consumers will seek out retailers who perfect inventory management and omnichannel offerings. Avoiding stockouts and accommodating the new ways consumers are shopping should be top priorities.”

Last week, the UK Fashion and Textiles Association (UKFT) said consumers will see prices of clothing and footwear jump for the foreseeable as companies struggle to absorb the rising costs linked to Covid-19, Brexit and staff shortages.