High street shops had their worst month in September for more than five years as they struggled to sell woolly jumpers and sturdy boots in the unseasonably warm weather.
Industry data from the British Retail Consortium, the retailers’ trade association, show retail sales fell 0.8 per cent last month compared with September 2013. That was the biggest annual fall since December 2008, apart from occasional distortions caused by the timing of Easter.
The unofficial numbers from the BRC are the latest weaker-than-expected economic indicator in the UK. However, industry experts attributed much of the disappointment to September’s warm, dry weather.
“Selling woolly jumpers in warm weather is a tough ask, even for the most talented of sales staff,” said David McCorquodale, head of retail at KPMG, the accountancy firm. “After a bumper summer, this is a disappointing outcome for retailers and has undoubtedly reversed some of the sales gains made in August. However, if temperatures drop to a more seasonal level this cooler weather will quickly turn around retailers’ fortunes and help them to sell their autumn/winter ranges.”
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Barclaycard published data on Monday that also pointed to a fall in the amount people spent on clothes. But the figures suggested consumer confidence remained strong overall. Barclaycard said total spending on UK debit and credit cards rose an annual 4.8 per cent in September, the fastest growth since May 2013.
There was no sign of relief for the UK’s supermarkets as a cut-throat price war continued to eat into their revenues.
In August, the Office for National Statistics reported the first annual drop on record in the amount people spent on food. The BRC data suggest that trend continued in September, with an annual drop of 0.2 per cent.
Food retailers are making billions of pounds of price cuts to fend off competition from discount chains such as Aldi and Lidl. Tesco has warned on profits three times in as many months, while Wm Morrison has announced a price-matching scheme aimed at the German discounters.
Joanne Denney-Finch, chief executive of IGD, a market intelligence company that collects food data for the BRC, said: “September’s exceptionally dry and warm weather wasn’t enough to improve on the previous month’s disappointing food and drink sales. It did, however, contribute to an excellent British wheat harvest, fitting a pattern of good cereal yields worldwide. This points towards continuing low food price inflation.”
Date: October 14, 2014