• Summer hangover impacts UK retail sales in September

    UK retail sales decreased by 0.2% on a like-for-like basis in September, compared to a 1.9% rise in the year earlier period, according to latest figures from the BRC and KPMG.

    On a total basis, sales increased 0.7% in September, against an increase of 2.3% in September 2017. This is the lowest since October, excluding Easter distortions, and below the 3-month and 12-month averages of 1.2% and 1.3% respectively.

    Over the three months to September, In-store sales of Non-Food items declined 2.7% on a total basis and 4.0% on a like-for-like basis. This is in line with the 12-month total average decline of 2.7%.

    Over the three months to September, Food sales increased 2.3% on a like-for-like basis and 3.4% on a total basis. This is below the 12-month total average growth of 3.7%.

    Over the three-months to September, Non-Food retail sales in the UK decreased 1.6% on a like-for-like basis and 0.6% on a Total basis. This is in line with the 12-month Total average decrease of 0.5%. September Non-Food sales remained in decline.

    Online sales of Non-Food products grew 5.4% in September, against a growth of 10.7% in September 2017, the second-best growth of 2017. This is the lowest growth since January and below the 3-month and 12-month averages of 6.7% and 7.1% respectively.

    Online penetration rate increased from 22.7% to 24.2% in September 2018.

    Helen Dickinson OBE, Chief Executive at the British Retail Consortium, said: “These figures lay bare the difficult operating environment for the retail industry. After a challenging August, constrained consumer spending in September has resulted in the weakest sales growth for five months.

    “The retail industry pays a disproportionate amount of tax. It represents 5% of the economy but pays 10% of business tax and almost 25% of business rates. A tax system skewed towards high taxes on people and property is contributing to stores closures and job losses and is stalling the successful reinvention of our high streets.

    “Taxes apply to all businesses, so the answer is not additional taxes solely on the retail industry. The Government urgently needs to reduce the business rates burden and create a tax system fit for the 21st century that more fairly distributes taxes right across the economy.”

    Paul Martin, UK Head of Retail at KPMG, said: “Like-for-like retail sales in September were down 0.2 per cent on this time last year, but then last year consumers were remaining more defiant in the face of Brexit and shopping regardless.

    “Grocery continued to perform, but growth in the category retreated in September. The non-food categories however, continued to disappoint. The historically reliable back-to-school push did not elevate apparel sales. Instead the latest tech launches were a rare source for optimism.

    “Online retail continued to fare better. Even clothing sales managed to grab the attention of those browsing the web to refresh their wardrobe.

    “The final golden quarter of the year marks the ultimate test for many players, but retailers must also successfully navigate: the upcoming government Budget, Black Friday, Christmas, and of course Brexit.”

    Jon Woolven, Strategy and Innovation Director at IGD, said: “The September food and grocery figures cemented the trend in late August for volumes to fall versus 2017, although with some inflation in the mix, sales value remained modestly in growth.

    “Shopper confidence has followed a downward path with those expecting to be financially better off over the year ahead dipping from 26 per cent in July to 22 per cent in September. Brexit related uncertainty probably plays a part in this, so retailers will be hoping for a clear resolution ahead of the Christmas shopping season.”

    AUTHOR

    Stuart O'Brien

    All stories by: Stuart O'Brien

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