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September retail sales lift indicates earlier Christmas shopping as British shops show ‘remarkable resilience’

The KPMG’s UK head of retail, Paul Martin has praised the resilience of the British retailer as ‘nothing shy of remarkable’ over recent months, as September witnessed retail sales increase 6.1 per cent on a like for like basis on the same period one year ago, in what analysts have indicated ‘are the first signs of an early Christmas.’

On a total basis, sales increased by 5.6 per cent in September, against a decline of 0.6 per cent in September last year, marking the best growth since December 2009, excluding Easter distortions, the British Retail Consortium has confirmed.

While in-store sales of non-food items over the three months to September declines 12.3 per cent on a total and 9.5 per cent on a like for like basis, the numbers are better than the six month and 12 month total average declines of 29.6 per cent and 18.8 per cent.

Over the same period, non-food retail sales increased 5.2 per cent on a like for like basis and 3.2 per cent on a total basis, while online non-food sales increased by 36.7 per cent in September, against a growth of 3.5 per cent in September 2019.

Helen Dickinson, OBE, chief executive at the British Retail Consortium, said: “September saw a big improvement in retail sales growth, however sales over the last six months are still down on the previous year. 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 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 their customers to do in order to manage demand at Christmas and keep people safe. However, store-based sales, excluding food are still in double digit decline.

“The industry is beginning to recover, however, forced store or warehouse closures during any future lockdowns could put paid to this progress. Retailers have invested hundreds of millions in making their premises Covid-secure, with perspex screens, social distancing, additional staff and hygiene measures.

“The industry also provides essential employment for three million workers in the UK and is already helping to contribute to the economic recovery.”

Paul Martin, UK Head of Retail at KPMG, added: “The resilience of British retailers has been nothing shy of remarkable in recent months, with 6.1 per cent like-for-like growth in September serving to reinforce that.

“That said, this month’s uptick is against the woeful performance recorded 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.

“Looking at the performance of specific retail categories, it’s clear that Back to School activity gave fashion and footwear retailers a much-needed boost from lacklustre performance. Elsewhere though the focus remains on home-related items, including household appliances, furniture and technology. Online sales have eased slightly, but it’s clear that the convenience of the channel is so well engrained into the consumer’s psyche now and is therefore here to stay.

“As we enter the all-important ‘golden quarter’ – when many retailers make the majority of their annual revenue – the fight for survival couldn’t be more intense. Close attention has to be paid to how players choose to tackle key events, like Black Friday, within a consumer landscape that has changed entirely.”

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