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BRC-KPMG Retail sales monitor - September

Sixth month of poor sales growth

GENERAL MERCHANDISE

BRC-KPMG Retail sales monitor - September

Sixth month of poor sales growth

UK retail sales values were up 0.5% on a like-for-like basis from September 2009, when sales had risen 2.8%. On a total basis, sales were up 2.2% against a 4.9% increase in September 2009.

Food sales growth picked up a little. Clothing slowed but footwear sales improved, helped by cold wet weather and new autumn/winter ranges. Furniture and floorcoverings was the only sector where sales were actually down on a year ago. Larger purchases in particular were affected by consumer uncertainty over job cuts and income prospects.

Non-food non-store sales (internet, mail-order and phone sales) strengthened further in September and were 19.1% higher than a year ago, the best since May, but amid increased promotional activity.

Stephen Robertson, Director General, British Retail Consortium, 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.
"Overall, non-food sales were down on a year ago for the first time since mid 2009. 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. 

Helen Dickinson, Head of Retail, KPMG, said,“The value of food sales crept up slightly as the impact of inflationary pressures continued to filter through. Non-food sales as a whole remained sluggish overall with like-for-like sales dipping into negative territory in September. But this is with significant variation in performance across individual sectors – footwear maintained the top spot in growth terms while furniture and floorcoverings was firmly entrenched once again as the worst performing sector, mirroring the recent news of house price falls. We hold our breath as to whether the upcoming Public Spending Review will derail current retail spending further – confidence is fragile." 

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