UK retail sales delivered a positive surprise in August, increasing more than expected on the back of a very strong display from food stores, while July figures were revised to show a bigger rebound than the one that was initially recorded.
According to official figures released by the Office for National Statistics (ONS) on Thursday (15 September), retail sales grew 5.9% on an annual basis in August, compared with an upwardly revised 5.8% increase in July and analysts' expectations for a 4.8% gain.
With the exception of textile, clothing and footwear and household goods stores, sales grew in all other sectors, the ONS added.
On a month-on-month basis, retail sales slid 0.3%, compared with a 2.1%increase recorded July, which was revised upward from 1.5%
When factoring in sales at petrol stations, retail sales increased 6.2%, from an upwardly revised 6.3% gain in July and compared with consensus for a 5.4% increase. On a monthly basis, retail sales including auto fuel fell 0.2%, against expectations for a 0.4% drop and 1.9% gain in the previous month. July's figure was revised up from the initial 1.4% estimate.
The ONS said the largest contribution to the decrease came from non-food stores, although that was offset by increases in non-store retailing, predominantly food stores and petrol stations.
Britain's vote to leave the European Union appears to have had little to no effect on consumers' willingness to spend, and the underlying trend in UK retail sales remains one of robust growth.
"Surveys in the immediate aftermath of the referendum showed a sharp dip in consumer confidence, leading to predictions of weak sales over the coming months," said Ben Brettell, senior economist at Hargreaves Lansdown.
"However, the post-referendum landscape has been characterised by surveys forecasting a sharp weakening of activity, which have thus far failed to appear in the hard data."
However, Paul Hollingsworth, UK economist at Capital Economics, warned that despite the positive figures some slowdown in the pace of spending growth looked likely.
"There are likely to be a number of headwinds, such as slower growth in employment and real earnings and lower confidence," he said.
"That said, low interest rates and a likely easing in the fiscal squeeze at the Autumn Statement later this year should help offset some of these effects."