Business

UK retail sales fall in September on weak clothes demand

Christmas shoppers in London Image copyright Getty Images

UK retail sales fell in September, adding to signs that the economic recovery may be losing steam.

The Office for National Statistics said sales volumes fell 0.3% on the month, more than expected and the weakest figure since January.

Mild weather in September put shoppers off buying winter clothes, but sales were weaker in other sectors too.

Slow wage growth, falling house prices, and global economic worries have raised concerns about the UK recovery.

Last week, the Chancellor, George Osborne, warned that the UK will not escape a slowdown in the eurozone economy.

Year on year, retail sales are up by 2.7%.

Many economists had predicted September's retail sales to fall 0.1% month-on-month, with a gain of 2.8% for the year.

The ONS said clothing and footwear sales fell by 7.8% in September from August, their biggest monthly fall since April 2012.

Prices in stores fell by 1.4% in September compared with a year earlier, their steepest decline in more than five years.

'No cause for alarm'

Consumer spending has helped drive the UK's economic recovery, but news on Thursday from retailers Debenhams and Tesco and estate agents Foxtons have underlined the slowdown.

A British Retail Consortium report last week showed that High Street spending suffered its biggest annual drop in nearly two-and-a-half years in September.

The retail sector accounts for nearly 6% of the UK economy.

Despite the fall in September sales, Capital Economics said it should not be a "major cause for alarm". Long term, incomes are set to rise and employment grow, the firm said in a note.

"And with low inflation set to boost real incomes, we are not concerned that September's drop in sales is a sign of weakness to come," it said.


Analysis: Anthony Reuben, BBC Head of Statistics

The retail sales figures make it look as if the growth in the amount of stuff we're buying in supermarkets has stalled in the past year.

Spending in the non-specialised food stores category, which is dominated by supermarkets, has gone up by more than 40% in the last decade, but has stopped rising in the past year, with our spending now about the same as it was in August last year.

But the ONS has released a separate analysis of supermarket sales, pointing to the volume of sales, which has been pretty much static not just for the past year but since 2006.

So what this means is that the big increase in the value of sales has been almost entirely due to rising prices, and that the increased price competition in the past year has brought that to a standstill.


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