UK retail sales record biggest rise in over a decade - BRC
By Abigail Townsend
Date: Tuesday 13 Oct 2020
(Sharecast News) - UK retail sales jumped to a near 11-year high in September, boosted by continued demand for home office products as well as consumers getting their Christmas shopping underway, industry data showed on Tuesday.
According to the latest BRC-KPMG Retail Sales Monitor, like-for-like sales rose 6.1% in September, compared to a fall of 1.3% a year earlier.
Total sales increased 5.6% against a decline of 0.6% in September 2019. That figure, which is above the six-month average decline of 1.1%, is the best growth since December 2009, the BRC said, excluding Easter distortions.
The best-performing category was computing, followed by household appliances. Furniture and home accessories also ranked in the top five.
However, clothing and footwear continued to struggle, and on a three-month basis, in-store non-food sales declined 12.3%, or by 9.5% on a like-for-like basis. Food sales increased 5.1% on a like-for-like basis over the same period.
Helen Dickinson, chief executive of the British Retail Consortium, said: "Tighter coronavirus restrictions have continued to hold back clothing and footwear, particularly as the government further restricts social events.
"With office workers still at home for the foreseeable future, the sales of electronics, household goods and home office products have remained high. September sales have also given retailers early signs that consumers are starting their Christmas shopping earlier this year, which retailers are encouraging customers to do in order to manage demand at Christmas."
Paul Martin, head of retail at KPMG, said: "This month's uptick is against a woeful performance in September 2019, and so caution remains vital. Last year, the prospect of a no-deal Brexit loomed over purchasing decisions, dampening demand, but now that same prospect is accompanied by the recent resurgence of Covid-19 numbers. Combined, these factors could have a significant impact on retail growth over the next months."
Samuel Tombs, chief UK economist at Pantheon Macroeconomics, said: "Demand weakened as September wore on. Data from Springboard show that footfall dipped below 70% of its level a year ago in the week ending 4 October, having peaked at 75% in the week ending September 6.
"Looking ahead, retail sales should remain above pre-Covid levels in the reminder of this year, even if the virus continues to spread. Shops have contributed little to the spread of the virus, and the government has ruled out forcing them to close again.
"Nonetheless, risking job losses and slowing wage growth will not leave retailers unscathed. As a result, we expect seasonally-adjusted retail sales to be lower at the end of this year than at present."
Greg Lawless, analyst at Shore Capital, said: "We have received anecdotal evidence that some retailers are seeing greater buying of Christmas product lines by consumers.
"While the headline writers will look at the highest growth rate since 2009, the devil is in the detail, with store-based non-food sales still in double-digit decline.
"While the latest government guidance on Covid means that all retailers can remain open for now, in terms of outlook we highlight continued uncertainty, the economic impact from Covid, potential Brexit fallout, and consumers being more targeted in their spending as potential worry lines for the sector."
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