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Non-food businesses feeling brunt of cost of living crisis

Bira CEO Andrew Goodacre

Lifestyle

Non-food businesses feeling brunt of cost of living crisis

The British Independent Retailers Association has said August’s Retail Sales Monitor (RSM) shows that non-food businesses are ‘feeling the brunt’ of the cost of living crisis.
BIRA, which works with over 6,000 independent businesses of all sizes across the UK, said the report shows these stores are suffering from a decline in sales and a significant reduction in sales. The BRC-KPMG Retail Sales Monitor for August 2023, revealed that UK Total retail sales increased by 4.1% in August, against a growth of 1.0% in August 2022. This was above the 3-month average growth of 3.6% and in line with the 12-month average growth of 4.1%.

Food sales increased 8.2% on a Total basis over the three months to August. This is above the 12-month average growth of 8.0%. For the month of August, Food was in growth year-on-year, while non-Food sales decreased 0.2% on a Total basis over the three-months to August. This is below the 12-month average growth of 0.9%. For the month of August, Non-Food was in growth year-on-year.

Over the three months to August, In-store Non-Food sales increased 1.3% on a Total basis since August 2022. This is below the 12-month average growth of 3.6%. Online Non-Food sales decreased by 1.7% in August, against a decline of 6.1% in August 2022. This was shallower than the 3-month and 12-month declines of 3.1% and the proportion of Non-Food items bought online (penetration rate) decreased to 34.1% in August from 34.7% in August 2022.

Bira CEO Andrew Goodacre:

“These figures show that it is the non-food businesses that are feeling the brunt of the cost of living crisis, with declining sales and a significant reduction in volumes. A recent report suggested that a 10% increase in the cost of essential items would reduce disposable income by 70%. Non-food expenditure depends on disposable income, and we are seeing the impact of the government and Bank of England measures to control inflation. Non-food businesses are crucial to the high street and need support to get through these difficult times. They also need certainty that costs such as rates, energy, and labour will not increase next year.

“It was positive to see the continued decline of internet sales, suggesting that people want to buy in shops and support their local community. This is another reason for supporting the high street businesses that are so integral to local communities,”

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