UK retailers endure worst September on record - BRC
UK retailers endured the worst September on record as Brexit uncertainty took its toll, according to figures released by the British Retail Consortium on Monday.
Total sales fell 1.3% compared to a 0.7% increase in the same month last year, making it the worst September since records began in 1995. On a like-for-like basis, sales were down 1.7% versus a 0.2% drop in September 2018.
The BRC said 12-month average growth came in at 0.2%, marking a new record low.
Over the three months to September, in-stores sales of non-food items declined 3.2% on both a total and LFL basis. This was worse than the 12-month total average drop of 2.9%.
Chief executive Helen Dickinson said: "With the spectre of a no-deal weighing increasingly on consumer purchasing decisions, it is no surprise that sales growth has once again fallen into the red. Many consumers held off from non-essential purchases, or shopped around for the bigger discounts, while the new autumn clothing ranges suffered from the warmer September weather.
"The longer-term prospect continues to be bleak, with the 12-month average once again plumbing new depths at a mere 0.2%. Online non-food sales growth was the lowest on record, though still compared favourably to the decline in growth at physical stores.
"With four months of negative sales growth since March, the ongoing political gridlock surrounding Brexit is harming both consumers and retailers. Clarity is needed over our future trading relationship with our closest neighbours, and it is vitally important that Britain does not leave the EU without a deal."
Samuel Tombs, chief UK economist at Pantheon Macroeconomics, said the poor performance was likely due to warm weather denting demand for clothing.
"September appears to have been a bad month for retailers, but we doubt that growth in households’ spending is fundamentally slowing. The poor performance in September likely has partly reflected the unusually warm weather; average temperatures were 0.5 degrees above their 1970-to-2018 September average. Clothing retailers introducing new winter ranges, therefore, likely struggled temporarily.
"Note too that the BRC’s survey is mainly comprised of large high-street retailers and so does not capture momentum in online sales. Moreover, consumers’ confidence remains in line with its long-run average, reflecting the recent strength of wage growth."
Tombs said the impact of the impending slowdown in the labour market on growth in households’ incomes should be offset by falling mortgage rates, the end of the freeze on the value of benefit payments in April 2020 and the easing of the drag on income growth from the rollout of workplace pensions schemes.