BRC-KPMG: September's retail sales show cautious growth ahead of Christmas season

UK retail sales were up 0.7% on a like-for-like basis from September 2012, when they had increased 1.5% on the preceding year. On a total basis, sales were up 2.4%, against a 3.4% increase in September 2012 and in line with the 12-month moving average.

The growth was driven by electricals and leisure goods, while Food experienced a decline in like-for-like sales.

Online sales of non-food products in the UK grew 13.4% in September versus a year earlier. Our online monitor published for the first time provides further analysis of online sales. Over the past three months, online contributed a third of the total non-food retail growth.

Helen Dickinson, Director General, British Retail Consortium, said: "The BRC-KPMG data shows that while total retail sales have continued to grow this month, it has been the weakest growth so far this year if you exclude Easter distortions. Grocery sales have been particularly hard-hit. However, we have seen strong demand for children's footwear and clothing, benefiting from the back-to-school period, and the continued improvement in the UK housing market is beginning to make a difference in the retail sector, shown by a strong performance in home accessories.

"Online sales were again the stand out performer, growing by double digits, and contributed strongly to non-food sales such as electricals and leisure items. The launch of our new Online Retail Sales Monitor highlights this, and in fact, without the contribution of online, clothing and footwear sales would have declined in September.

"Retailers are hiring extra staff and readying their offer for the crucial Christmas period at the moment, so they will be looking at these figures closely as they gear up for the festive season."

David McCorquodale, Head of Retail, KPMG, said: "These figures are a reality check and will make retailers nervous as we enter the run up to Christmas. Unseasonably warm weather stifled sales of autumn and winter collections in September and the recovery in home related items flattened. Consumers are still cautious about spending and are reluctant to restock their wardrobes with winter woollies until the weather cools.

"Sales of children's clothing and shoes put in a strong performance, but this surge is likely to simply be a hangover from the traditional back to school spending spree. The slowdown of the food and drink sales performance reflects the battleground for market share amongst the grocers.

"The stark fact is the retail recovery remains fragile and in the lead up to Christmas retailers, who are generally carrying less stock than in prior years, will need to manage promotional activity carefully to maintain margins."

Source : Helen Dickinson, Director General - BRC
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