Retail sales rise driven by food price inflation

Total sales rose 2.3% in the four weeks from August 27 to September 30 and 1.9% on a like-for-like basis.

The hike was led by the rise in food sales, which increased 3.5% in total and 2.5% on a like-for-like basis. This increase was above the 12-month average for total growth of 2.9%, which is the highest 12-month average since August 2013.

Non-food total sales rose 0.9% on a total basis and 0.9% on a like-for-like basis, above the 12-month total average growth of 0.7%.

However, non-food in-store sales declined by 1.5% on a total basis and 2% on a like-for-like basis.

Non-food online sales rose 10.7%, above the three-month and 12-month averages of 10% and 8.8% respectively. Online penetration was at its highest since January, reaching 22.4%.

BRC chief executive Helen Dickinson said: “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.”

KPMG’s head of retail Paul Martin added: “With potential interest rate rises on the horizon, shaky consumer confidence and ever-increasing levels of household debt, uncertainty remains.

“We’re now moving into the final quarter, which will ultimately define whether 2017 has been a good or bad year for retailers.”