Shoppers tentatively hit the high streetNew data hint at hopeful outlook towards Christmas

11 October 2011

Retail sales

BRC figures show that retail sales increased by 2.5% in September 2011 compared to the previous month

New figures from the British Retail Consortium/KPMG show that UK retail sales were 0.3% higher in September 2011 than the year before.

The slight improvement in the retail performance last month saw sales rise by 2.5% against August 2011, but the overall picture was still patchy with some sectors offering hope that sales will pick up in the all-important run up to the Christmas period.

Food sales growth was similar to that in July and August. Non-food sales improved a little but remained challenging. Homewares showed a modest uplift, though sales were still often deal-driven. 

Larger purchases in particular were hit by fragile consumer confidence and the weak housing market. Clothing sales dropped off sharply in the end-of-month heatwave.

Non-food non-store (internet, mail-order and phone) sales growth fell back after picking up in August. Sales were 10.1% up on a year ago, down from 12.6% in August and well below the 19.1% in September 2010.

Hot weather good for food, bad for clothing

Stephen Robertson, director general, British Retail Consortium, said: 'In these harsh times, we have to be thankful for this minor improvement in growth compared with August but underlying conditions remain weak. Spending growth is below inflation meaning customers are buying less than this time last year. And there's no guarantee next month's figure will be better. Total sales growth has been flipping between 1.5 and 2.5 per cent for four months now and year-to-date like-for-like growth is zero.

'Short-lived factors such as the weather and discounting are influencing sales not any fundamental change in how customers are feeling. Hot weather at the end of September boosted spending on food and drink, but clothing sales slumped as the sun undermined interest in winter ranges.

'As we head into the year's most important trading period, we need a return of optimism. That requires people to feel that next year they will see some payback for the current pain.'

In the balance

Paul Davies, analyst at Which?, added: 'While retailers are still hoping for a bumper period in the last quarter of 2011, these figures provide only mild grounds for optimism.

'The hot weather at the end of September didn't help as people found other things to do rather than hit the shops. People are still reluctant to commit to the purchase of big-ticket items as uncertainty remains about job prospects with the economy showing few signs of improving.'

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