September retail sales grow by 2.5 per cent

Like-for-likes up 0.3 per cent year-on-year; Non-food, non-store sales growth slows.
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UK retail sales values for the month, were 0.3 per cent higher on a like-for-like basis, compared to September 2010, when sales rose by 0.5 per cent.

On a total basis, sales increased by 2.5 per cent, against a 2.2 per cent in the same month in 2010.

The British Retail Consortium reported that non-food sales improved slightly but remained challenging. Larger purchases in particular were affected by 'fragile consumer confidence' and a weak housing market.

Stephen Robertson, director general, British Retail Consortium, said: "In these harsh times, we have to be thankful for this minor improvement in growth compared with August but underlying conditions remain weak.

"Spending growth is below inflation meaning customers are buying less than this time last year. And there's no guarantee next month’s figure will be better. Total sales growth has been flipping between 1.5 and 2.5 per cent for four months now and year-to-date like-for-like growth is zero.

"Short-lived factors such as the weather and discounting are influencing sales not any fundamental change in how customers are feeling.

“As we head into the year's most important trading period, we need a return of optimism. That requires people to feel that next year they will see some payback for the current pain."

Helen Dickinson, head of retail, KPMG, added: "While we were seeing reasonable growth during the first weeks of September, hopes for a major improvement on recent months were dashed as the exceptionally hot weather kicked in during the final week, when hitting the shops was well down our list of priorities.

"As we are entering the crucial season in the run-up to Christmas the outlook may be described as “hopeful” but that’s as good as it gets I am afraid."

Non-food non-store sales fell back after picking up in August. Sales were 10.1 per cent up year-on-year, down from 12.6 per cent the previous month and 'well below' the 19.1 per cent growth of September 2010.

Robertson commented: "With in-store spending on non-food goods barely growing at all, 10.1 per cent is a good year-on-year increase for online, mail order and phone sales but it’s lower growth than the previous month and the third weakest of the last 12 months.

"Some online retailers suffered as hot weather meant that people were outdoors rather than indoors with their computers. The main picture is, the structural growth of internet retailing continuing but low confidence and falling disposable incomes putting people off non-essential spending."

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