UK Retail sales slowed in August though remained in growth, up 1% on a total basis (July +2.3%) or +0.5% LFL (July +1.6%), as consumers reacted to the ever-increasing cost-of-living and inflation by reining-in spending. Retail price inflation is lower than 10%+ general inflation. A better read on underlying consumer demand is likely in September, with August’s demand impacted by the heatwave, which drove growth of associated categories such as suntan cream, health & beauty (the strongest performing category in August), barbeque food and drinks, and more people traveling abroad this year. Food led the way driven by inflation, with volumes again down, according to the BRC. 3-month average total sales were up 3.8%, with LFL +3.3%. Food inflation accelerated to 9% in August, according to the NielsenIQ shop price index, from 7% in July. Trading down continues, with shoppers focusing more on value lines, private label and discounts. Non-food sales suffered as discretionary spending continues to be squeezed. Over the 3 months to August, non-food sales declined by 2% on a total basis with LFL sales down 2.6%. Channel shift to in-store continues within non-food. Online sales fell 6.1% in August with in-store non-food sales growing on average by 1.4% over the last three months. Online penetration was 38.5% in August versus a 12-month average of 40.8%. Fashion again outperformed homewares, though the demand started to fall away. The wedding season is coming to an end and back-to school was delayed. The significant drop back in clothing sales, though, could be an early indicator that the consumer is cutting down on non-essential shopping. Sales of knitwear were said to be unseasonably high and footwear sales were down on pre-pandemic levels. White goods and homewares were hardest hit. Homewares, house textiles and furniture sales were down on pre-pandemic levels. Demand for sofas, beds and living room furniture as well as bath and bed linens continued to weaken. Within household appliances, people ae looking for energy-saving items with high demand reported for air-friers. Computing remained in decline, despite August usually seeing a pre university pick up. Electricals & electronics, such as TVs and audio, also saw lacklustre demand. Elsewhere, the good weather for most of the month boosted sales of outdoor toys, though the toys and baby equipment category has now been in decline for 22 months. Electronics and gaming continued to perform poorly despite stock levels ahead of last year.