UK retail sales boosted by fashion price inflation says BRC
How healthy is UK retail? That’s a tough question to answer and the latest monthly British Retail Consortium/KPMG survey doesn’t necessarily help. It showed that retail sales grew in September but the rise was all about people buying essentials from food to cold weather clothing and also having to pay higher fashion prices.
The BRC said comparable UK retail sales rose 1.9% last month and total sales rose 2.3%. However, both of those figures are better than the year-ago performance with September 2016’s sales rises having been more anaemic. The figures were also higher than the three- and 12-month averages.
Non-food sales rose only 0.5 on a comparable basis and 0.9% in total last month so much of the overall retail sales growth was clearly caused by shoppers buying more (or paying more for) groceries.
Online continued to rise though with sales of non-food products up 10.7% in September, above both the three-month and 12-month averages of 10.0% and 8.8% respectively. The online penetration rate increased from 21.5% in September 2016 to 22.4% this time, the highest rate since January.
But BRC chief executive Helen Dickinson said that while last month’s figures seem like good news, looking beneath the surface, “we see that much of this growth is being driven by price increases filtering through, particularly in food and clothing, which were the highest performing product categories for the month.”
She added: “Retailers have worked hard to keep a lid on price rises following the depreciation of the pound, but with a potent mix of more expensive imports and increasing business costs from various government policies, something had to give at some point.”
She also said consumer spending is very focused towards essentials, which doesn’t only mean the weekly grocery shop. “Consumers [are] buying their winter coats and back to school items, but shying away from big ticket items such as furniture and delaying the renewal of key household electrical goods,” she explained.
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