Sales growth slows in September

Total sales increased 2.2% last month.

Food and drink like-for-likes rose by 2.1% in the three months to September but the BRC said this was due to inflation filtering through. Non-food like for like sales in the three month period fell 0.4%, despite VAT being higher than it was last year.

Cold weather and new autumn collections helped footwear sales, but overall sales growth in the clothing sector slowed. The furniture and floorcoverings sector was the only sector to show a decline on a year ago.

BRC director-general Stephen Robertson said: “Sales growth continues to be poor. We’ve now had six straight months of low growth thanks to persistently weak consumer confidence and worries about the future. What growth there was largely came from food with the performance helped by food inflation.

“With VAT higher than it was last year, and pushing up sales values, it’s an even worse performance than it looks. There is little evidence yet of major purchases being brought forward from 2011 to beat the coming VAT increase

 “Despite widespread discounting, sales of major items had the toughest time. It’s clear people are cautious and major spending is largely on hold.”  

Internet sales proved a bright spot, with non-food, non-store shopping up by 19.1% on the previous September, reflecting an “increased promotional activity as well as demand for new autumn ranges”.

Helen Dickinson, head of retail at KPMG, said: “We hold our breath as to whether the upcoming Public Spending Review will derail current retail spending further – confidence is fragile.”

Details of the review, expected to involve large-scale public sector job cuts, are to be unveiled on October 20.