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Retail sales improve marginally in September

UK retail sales climbed 0.3 per cent on a like-for-like basis in September, compared to the same month last year, according to new research published today by the British Retail Consortium (BRC) and professional services firm KPMG.

This will come as some relief to traders who have been battling inflationary pressures and weakened demand in recent months, but there are still plenty of worrying indicators in the BRC’s report.

Whilst total sales rose 2.5 per cent year-on-year during the month, food sales were broadly flat compared to August and July and the increase in non-food trading was largely driven by promotions and discounting.

Hot weather at the end of September had a mixed impact, boosting food & drink sales but stifling fashion retailers trying to promote their autumn/winter collections.

Stephen Robertson, Director General of the BRC, 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 LFL growth is zero."

“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.”

Perhaps most disappointing last month were the figures for multichannel trading, which has been the only part of the industry consistently growing at double digits over the last year.

Non-food non-store sales, which include internet, mail-order and phone sales, grew at just 10.1 per cent year-on-year, compared to a 12.6 per cent rise in August and well below the 19.1 per cent jump seen in September last year.

Helen Dickinson, Head of Retail KPMG, said: “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.

“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.”

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