October 28, 2016
Sales growth is returning, but non-food sales remain ‘sluggish’, new figures have revealed.
The British Retail Consortium’s Consumer Confidence Index saw figures return to pre-EU referendum levels with a year-on-year increase in September of 1.3%. However, this was lower than the 3.9% increase recording in September 2015.
Like for like sales also increased slightly by 0.4%.
In the three months to September 2016, sales grew by 1%, which was higher than the 12-month average of 0.9%. This was mainly driven by food sales, which increased 1.6% over the three-month period. However, non-food sales saw a slower uptake, increasing by just half a per cent.
Helen Dickinson OBE, BRC chief executive, said: “Today’s figures show a return to sales growth, primarily driven by stronger food sales which saw their highest increase since November 2013. On the flipside, sales growth of non-food items remained sluggish. Despite a flurry of back- to- school purchases, clothing sales in particular had a more challenging month.
“September saw the consumer confidence index restored to levels seen before the EU referendum in June, which did translate into a willingness to spend on bigger-ticket items. However, the monthly outturn continues to highlight ongoing volatility in retail spending and to reflect longer- term economic headwinds as retailers begin to seek to mitigate the impact of higher import costs due to the fall in the value of the pound.
“Against the current backdrop of intense competition and transformational change in the industry, it’s crucial that retailers are able to continue their excellent track record of keeping prices low for their customers and offering great choice and value. With that in mind, the BRC will be ensuring that in the forthcoming Brexit talks, Government negotiators have their sights set firmly lowering import costs as well as avoiding any increase in tariff costs as the UK leaves the EU.”
Paul Martin, newly-appointed KPMG head of retail, added: “After a fairly disappointing August, the ‘back to school’ rush resulted in a much needed uplift for retailers in September with total sales up 1.3% in the month.
“The shoe was truly on the right foot for children’s footwear, with the category leading the way in the month. No doubt timely in-store promotions helped to capture the attention of shoppers, whilst the August bank holiday that fell into this month’s figures also helped to boost sales. Sadly this success wasn’t mirrored for women’s clothes and footwear, with consumers seemingly uninspired by autumn collections due to warmer weather in September.
“Elsewhere, it was yet another month of positive growth for the grocers. Late summer temperatures combined with shoppers continuing to benefit from the ongoing price war has meant food and drink sales have been in the black for a full quarter – undoubtedly welcome news for the sector.
“As we move into the all-important golden quarter at the end of the year, retailers will be looking to make the run up to Christmas, including Black Friday, a success.”
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