Retail sales rose 1.3% in September, against a 3.9% increase in September 2015, which had been the best month of 2015, excluding Easter distortions, according to the latest BRC-KPMG Retail Sales Monitor. On a three-month basis, total UK retail sales rose 1.0%, marginally ahead of the 12-month average of 0.9%. This is the slowest 12-month average on records since the inception of the RSM in 1995.
On a three-month basis, total food sales increased 1.6%, its best level since November 2013 excluding Easter distortions. The recent pick-up in the food performance places the 3-month average at about three times the rate of the 12-month average of 0.5%.
On a three-month basis, total non-food sales rose 0.5%, dragging down the 12-month average to 1.3%. The fashion categories were affected by the warmer weather while the back-to-school and big ticket items reported solid growth.
Helen Dickinson, chief executive, British Retail Consortium, said: “Today’s figures show a return to sales growth, primarily driven by stronger food sales which saw their highest increase since November 2013. On the flipside, sales growth of non-food items remained sluggish. Despite a flurry of back- to- school purchases, clothing sales in particular had a more challenging month.
“September saw the consumer confidence index restored to levels seen before the EU referendum in June which did translate into a willingness to spend on bigger ticket items. However, the monthly outturn continues to highlight ongoing volatility in retail spending and to reflect longer- term economic headwinds as retailers begin to seek to mitigate the impact of higher import costs due to the fall in the value of the pound.
“Against the current backdrop of intense competition and transformational change in the industry, it’s crucial that retailers are able to continue their excellent track record of keeping prices low for their customers and offering great choice and value. With that in mind the BRC will be ensuring that in the forthcoming Brexit talks, Government negotiators have their sights set firmly lowering import costs as well as avoiding any increase in tariff costs as the UK leaves the EU.”
Paul Martin, newly appointed head of retail, KPMG: “After a fairly disappointing August, the ‘back to school’ rush resulted in a much needed uplift for retailers in September with total sales up 1.3 per cent in the month.
“The shoe was truly on the right foot for children’s footwear, with the category leading the way in the month. No doubt timely in-store promotions helped to capture the attention of shoppers, whilst the August bank holiday that fell into this month’s figures also helped to boost sales. Sadly this success wasn’t mirrored for women’s clothes and footwear, with consumers seemingly uninspired by autumn collections due to warmer weather in September.
“Elsewhere, it was yet another month of positive growth for the grocers. Late summer temperatures combined with shoppers continuing to benefit from the ongoing price war has meant food and drink sales have been in the black for a full quarter – undoubtedly welcome news for the sector.
“As we move into the all-important golden quarter at the end of the year, retailers will be looking to make the run up to Christmas, including Black Friday, a success.”
Food and drink sector performance
Joanne Denney-Finch, chief executive, IGD, said: “In encouraging news for food and grocery companies, the growth seen through the summer months continued into September. Shoppers are feeling generally upbeat, with three-quarters (76%) expecting their personal financial situation either to improve or stay the same in the coming year, up from 69% in August.
“Although the sales growth remains modest, grocery retailers and manufacturers have reason to feel optimistic as Halloween, Bonfire Night and Christmas come on to the horizon.”