Sales shine in September for UK retailers

Pedestrians are reflected in a shop window on Oxford street in central London on May 16, 2017.
British inflation hit a 3.5-year high in April, official data showed today, owing mainly to higher airfares, but also as a weak pound raises import costs. / AFP PHOTO / Daniel Leal-Olivas        (Photo credit should read DANIEL LEAL-OLIVAS/AFP/Getty Images)

September welcomed a second consecutive month of relatively good sales for the UK retail sector, with clothing leading the way as one of the best performing categories.

Covering the four weeks from August 27 – September 30 2017, the latest BRC – KPMG Retail Sales Monitor reveals on a total basis a 2.3% rise in sales for September, against a growth of 1.3% in the same period last year. This is above the 3-month and 12-month averages of 2.1% and 1.7% respectively.

On a like-for-like basis, UK retail sales increased by 1.9%, when they had increased 0.4% from the preceding year.

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The top performing product categories for the month were food and clothing.

Over the three-months to September, non-food retail sales in the UK increased 0.5% on a like-for-like basis and 0.9% on a total basis, above the 12-month total average growth of 0.7%.

Online sales of non-food products posted a growth of 10.7% in September, above both the 3-month and 12-month averages of 10.0% and 8.8% respectively. Online penetration rate increased from 21.5% in September 2016 to 22.4% in September 2017, the highest penetration rate since January.

Online has been the biggest beneficiary of the resilience in consumer spending capacity in the last two months, sustaining a return to double digit year on year growth figures as shoppers responded well to discounts and the ongoing investment by retailers in improving the mobile shopping experience.

BRC chief executive, Helen Dickinson, comments: “September saw a second consecutive month of relatively good sales growth which should indicate welcome news for retailers and the economy alike. Looking beneath the surface though, we see that much of this growth is being driven by price increases filtering through, particularly in food and clothing, which were the highest performing product categories for the month. Retailers have worked hard to keep a lid on price rises following the depreciation of the pound, but with a potent mix of more expensive imports and increasing business costs from various government policies, something had to give at some point.

She continues: “September’s overall growth may increase the likelihood of an uplift in interest rates in November. So with stronger headwinds brewing, its vital government keep a tight lid on those costs under its control, which impact on retailers, the cost of doing business and ultimately consumers. The Chancellor has a great opportunity to do just that in his upcoming budget by not adding yet another rise on the business rates bill of every retailer in the country.”

We are now moving into the final quarter, which encompasses the all-important Christmas trading season and will ultimately define whether 2017 has been a good or bad year for retailers in the UK.

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