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Retail news round-up: Sales boost surprise; business rates warning; concern over card costs

The Office for National Statistics (ONS) reported that retail sales in August rose by 3.3% compared with the same month a year earlier and by 0.3% on a month-to-month basis. This has surprised economists who had expected shoppers to rein in their spending. The unexpected results were driven by a rise of 4.5% in the sales of household goods between July and August, the biggest monthly increase since May 2016, and a remarkable 7.8% boost for furniture and lighting. There was a 2.8% sales rise in other non-food shops and online spending hit a record 18.2% of all retailing.

Retailers face paying an additional £190m in their annual business rates from April 2019 after inflation rose 2.7% in August, the British Retail Consortium (BRC) has warned. It is expected the government will announce in October’s Budget that business rates will be pegged to the ONS Consumer Price Index, rather than the Retail Price Index.

For the first time the value of purchases made by card now accounts for more than three-quarters of all retail sales, according to the BRC’s latest annual payments survey. This has partly been driven by UK customers increasingly using cards for lower value payments. As card payments have become more dominant, retailers have expressed concern at the rising cost of accepting cards. The survey revealed that retailers spent an additional £170m to process card payments in 2017, reaching almost £1bn for the year

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European competition authorities are to launch an investigation into Amazon’s dual role as a competitor but also host to third-party merchants that sell products on its websites. Separately, the internet giant is developing a ‘shoppable’ series for Amazon Prime Video which will feature supermodel Heidi Klum and fashion consultant Tim Gunn, hosts of TV’s popular Project Runway show. It is also reported that Amazon could open up to 3,000 high-tech inner-city grocery shops in the US by 2021.

The Ombudsman Service has called on the government to improve its protection for shoppers and reminded consumers that retail is one of those sectors not subject to an independent dispute resolution or ombudsman scheme. Currently, the only option for those who believe they have received faulty goods or shoddy service is to take a business to court.

Harrods’ invitations to buy £20 tickets to visit its Santa’s grotto attraction have only been sent to parents who reportedly spent a minimum of £2,000 a year in the store.

Link’s ATM Footprint report reveals that more than 250 free-to-use cash dispensers are closing each month in the UK. Some 1,300 shut down between the end of January and the beginning of July.

Confidence among small businesses has dropped significantly this quarter, and the self-employed are feeling particularly pessimistic about their prospects in the coming months, according to the latest Federation of Small Businesses small business index. Amid ongoing Brexit uncertainty, fewer than one in three (29%) small firms expect their performance will improve over the next quarter. The confidence measure stands at -1.7 in Q3 this year, down from +12.9% in Q2 2018.

Responding to a report from the government migration advisory committee (MAC), the BRC’s chief executive, Helen Dickinson, says that European Economic Area nationals play ‘an invaluable role’ in the retail industry and its supply chain and tightly restricting the migration system would have a negative impact on consumers. The MAC report said that free movement from the EU should end after Brexit and the UK should embrace a Canada-style system in which there is no preferential access to the labour market for citizens of any other country.

Alan Monahan