September Retail Sales Higher Than in August

Michelle Remo, “Big 4″ observer
October 14, 2011 /

UK retail sales values were 0.3 percent higher on a like-for-like basis from September 2010, when sales had risen 0.5 percent. On a total basis, sales were up 2.5 percent, against a 2.2 percent increase in September 2010.

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 percent up on a year ago, down from 12.6 percent in August and well below the 19.1 percent in September 2010.

These were among the findings of the BRC-KPMG Retail Sales Monitor September 2011.

“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,” Stephen Robertson, Director General, British Retail Consortium, said.

Robertson warned that there’s no guarantee that 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,” Robertson added.

“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.”

“While we were seeing reasonable growth during the first weeks of September, hopes for a major improvement on recent months were dashed as the exceptionally hot weather kicked in during the final week, when hitting the shops was well down our list of priorities,” Helen Dickinson, Head of Retail, KPMG, said.

“The food sector proved again to be more resilient than other sectors although, with the new academic year starting, schoolwear and shoes also did well. Sales of home accessories, house textiles as well as toiletries and cosmetics showed signs of improvement. However, with consumers’ incomes being squeezed from all sides, many shoppers continue to steer clear of big-ticket items,” Dickinson added.

“As we are entering the crucial season in the run-up to Christmas the outlook may be described as “hopeful” but that’s as good as it gets I am afraid.”

According to Joanne Denney-Finch, Chief Executive, IGD, the sunny weather, especially at the end of the month, provided a mild boost to some food and drink sales such as barbecue products.

“But economic conditions remain uncertain. Compared to last September, the proportion of shoppers trying to save money has risen by nearly half. But our ShopperTrack research also shows 41% are investing more time and effort in their shopping to help them spend less or improve the quality of their groceries,” Denney-Finch said.

“Food and grocery companies are intensifying their attempts to prove to hard-pressed shoppers that they provide the best value.”

Coomenting on the non-food non-store figures, Stephen Robertson, Director General, British Retail Consortium, said 10.1 per cent is a good year-on-year increase for online, mail order and phone sales but it’s lower growth than the previous month and the third weakest of the last 12 months, with in-store spending on non-food goods barely growing at all.

“Some online retailers suffered as hot weather meant that people were outdoors rather than indoors with their computers. The main picture is, the structural growth of internet retailing continuing but low confidence and falling disposable incomes putting people off non-essential spending,” Robertson said.


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