HIGH street sales growth came to a grinding halt last month for the first time since February after Britain’s Indian summer put shoppers off stocking up on winter clothing, according to new research out today.
Accountancy firm BDO’s monthly high street sales tracker shows sales dipped by 2.9 per cent in September, ending the first six-month run of consecutive growth since 2010.
The fashion sector was hit particularly hard, with like-for-like sales down 5.9 per cent while sales of lifestyle products such as sports goods were flat. Only homeware sales showed any strength, with growth of 9.7 per cent.
This was supported by separate data, released yesterday by Visa Europe, showing a 6.5 per cent fall in spending on clothing and footwear in September.
Last week, retail bellwether Next joined John Lewis in warning that one of the warmest Septembers on record had slowed sales, while on Monday Citi analysts slashed their forecasts their sales forecasts for Marks & Spencer’s clothing and homeware sales.
Despite September being a poor month for the high street, retail sales are expected to increase by about three per cent year-on-year over the next 12 to 18 months, according to analysts at Moody’s.
The credit agency said in a report out today that it expected the UK retail industry to outperform the rest of the Eurozone next year, fuelled by improving GDP growth, declining unemployment and low interest rates.
However, it warned growth could slow if wages did not increase or if rising interest rates hit consumer spending. Food retailers are also expected to remain under severe pressure as they try to close the gap with discounters.
The British Retail Consortium and Neilson said shop prices fell by 1.8 per cent in September, with food inflation remaining at a historic low of 0.3 per cent as supermarkets continued slash prices to fend off competition.
Sainsbury’s revealed a slump in second-quarter sales last week and cut its sales forecast for the year on the back of falling commodity prices and what chief executive Mike Coupe described as the most challenging conditions of his 30-year career in retail.