UK retailers suffer worst September on record - BRC

Retailers have endured their worst September month in over 20 years amid the political ‘gridlock’ surrounding Brexit a report said

Retailers have endured their worst September month in over 20 years amid the political ‘gridlock’ surrounding Brexit a report said

According to the latest British Retail Consortium (BRC) figures, ecommerce had its worst ever month in September as sales grew just 0.7% compared to the same time a year ago.

The British Retail Consortium (BRC) has released figures covering the five weeks from 25th August to 28th September 2019. In the same period, food sales rose 0.3% on a like-for-like basis and 1.2% on a total basis.

British retailers endured their worst September since at least the mid-1990s as people spent money on entertainment instead, according to surveys that painted a muted picture of household demand ahead of Brexit.

Total retail sales fell by 1.3% year-on-year in September, compared with a 0.7% annual increase in September 2018.

Helen Dickinson, chief executive of the BRC, 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". However, clothing retailer Next said a disappointing start to autumn trading was down to unusually warm weather in parts of Britain, rather than shoppers holding back on buying new items because of Brexit.

Dickinson went on to predict the longer-term prospect of retail sales would continue to be "bleak" with the 12-month average once again plumbing new depths at just 0.2%. Online sales of nonfood items were the worst ever recorded.

On a like-for-like basis, United Kingdom retail sales decreased by 1.7% annually.

"Worryingly", even online sales growth "moved closer to stalling", added KPMG's head of retail Paul Martin.

It also showed strong growth in digital services such as Netflix, Spotify and Amazon Prime but confidence in the economy remained uncertain and one in eight consumers were stockpiling Christmas food and drink in the run-up to Brexit.

She continued: 'Clarity is needed over our future trading relationship with our closest neighbours and it is vitally important that Britain does not leave the European Union without a deal'. Consumers are choosing to focus on the essentials, with food one of the few categories delivering growth.

Paul Martin, the United Kingdom head of retail at KPMG, predicted a period of increased promotional activity to allow retailers to clear surplus stock. "October, and the ramping-up of Brexit plans, will clearly be a real test for the industry as a whole".

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