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BRC-KPMG: September retail sales were best since January 2014

British Retail Consortium

UK retail sales increased 2.6% on a like-for-like basis from September 2014, when they had decreased 2.1% on the preceding year. On a total basis, sales were up 3.9%, against a 0.8% fall in September 2014. This is the fastest growth since January 2014, excluding Easter distortions. Adjusted for the BRC-Nielsen Shop Price Index deflation, total growth was 5.8%.

- The inclusion of the Bank Holiday into the September period positively distorted the figures of the back-to-school-sensitive categories, particularly the fashion and home categories. September's figures were also flattered by a soft comparable period last year.

- Total Food sales grew 0.2% over the 3 months to September, in line with their twelve-month average, which reported its best performance since July 2014. On a 3-month basis, total Non-Food sales were up 3.7%, ahead of their 12-month average of 3.3%.

- Online sales of Non-Food products in the UK grew 14.2% in September versus a year earlier, when they had grown 8.2%. The Non-Food online penetration rate was 17.7%, up from 17.2% in September 2014.

Helen Dickinson, Chief Executive Officer, British Retail Consortium, said: "September was a bright month for retail, with the strongest sales performance since January of last year, excluding Easter distortions. However, sales growth was boosted by the August Bank Holiday, which fell in this period as opposed to August last year, shifting back-to-school sales into September, so such strong growth is likely to be overstated. September's figures were also flattered by a soft comparable period last year, which was the worst performance of 2014. The three month average growth for non-food was 3.7 per cent, ahead of the 3.3 per cent twelve month average. Furniture was September's top performing category, with the highest sales seen since April of 2014. Footwear, the second best performing category, had its best performance since March of last year.

"There was good news for food sales too, thanks in no small part to the Rugby World Cup. Food had, in real terms, its highest twelve month average sales since February of 2011, which is particularly positive news following a prolonged period of decline. Retailers are seeing some improved consumer demand but they continue to operate in a very competitive environment. They are looking to Government to lighten the excessive tax burden they face."

David McCorquodale, Head of Retail, KPMG, said: "With the summer bank holiday falling into September, top line trends for the month were inevitably inflated with total sales up 3.9 per cent compared to 2014. However, taking the 3 months July to September, total sales across all categories also showed a bounce back, up 2.2 per cent in the period suggesting a stronger finish to the British summer overall.

"Fashion sales were given a particular boost in September with more autumnal weather encouraging shoppers to check out the new season ranges and last minute back-to-school purchases lifting sales of children's clothes and shoes. Home and furniture also benefited from the bank holiday timing as consumers took the opportunity to fit in a bit of redecorating.

"Despite the start of the Rugby World Cup encouraging people to get the beers and burgers in, food and drink sales showed no signs of accelerating in the three months July to September. Grocers will be hoping that consumers will continue to revel in the atmosphere in spite of England's early exit from the tournament.

"Moving into the final quarter of 2015, retailers will be keeping a watchful eye on Christmas with the launch of festive campaigns starting to wet consumers' appetites and Black Friday expected to be big again."

Food & Drink sector performance – Joanne Denney-Finch, Chief Executive, IGD, said: "In recent months food and drink sales have tended to vary a little above or a little below last year's figure, and September's performance was almost flat. However, this disguises a huge amount of change taking place. The UK grocery market continues to provide shoppers with more options, including food to go, online, discount and convenience shopping. The major players are also investing in revitalising their stores. The result is three quarters of grocery shoppers are very satisfied with their overall experience; 57 per cent say they like shopping for food, up from 43 per cent seven years ago."

Source : BRC & KPMG

13 October 2015

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