- UK retail sales values were up 1.5% on a like-for-like basis from September 2011, when they were up 0.3% on the preceding year. On a total basis, sales were up 3.4%, against a 2.5% rise in September 2011.
- The recovery from last month was mainly driven by Clothing and Footwear, which saw its best growth since last Christmas, partly helped by the favourable weather. There were also some signs of revival in the Home and Furniture market.
- Online sales picked up from August’s record low ending the month on a strong note. However, on average, September – at 9.9% – remained weaker than this year’s trend.
Stephen Robertson, Director General, British Retail Consortium, said: “After a poor summer for sales, this is a return to growth rates we’ve come to regard as relatively acceptable in these relentlessly tough times. The improvement has come from the weather and a change in the mindset of some customers.
“This September’s colder conditions contrast sharply with the heatwave a year ago, giving clothing and footwear sales a major boost as shoppers stock up early on coats, boots and knitwear. Children’s clothes and shoes did particularly well in September, partly because many people left back-to-school buying later this year as a result of competition for their time in August.
“It’s not all good news – the on-going challenges in the housing market contributed to sales of home accessories falling at their fastest for three years – but there are signs that people are acclimatising to the new realities. Difficult has become the new norm. Customers are still cautious but less fearful than they were. The squeeze on disposable incomes has eased for some and, along with lots of discounts, left them feeling it’s time to stop postponing spending. Retailers will be hoping this modest boost strengthens as Christmas approaches.
David McCorquodale, Head of Retail, KPMG, said: “After a turbulent year on the UK high street, September’s sales figures bring much needed relief for retailers. The news that like-for-like sales rebounded to achieve the highest increase seen in 2012 may give many renewed heart as they enter the most important trading period of the year.
“September’s surge in sales was driven primarily by customers buying winter woollies as the arrival of autumn/winter fashions heralded the end of an often wet summer and ‘back-to-school’ drove increases in children’s clothing and shoes.
“With the rent paid for the last quarter before Christmas and most seasonal orders now made, the bets for the final quarter have been placed. Retailers will now be hoping that the consumer finds some confidence for 2013 to drive sales for the next three months. If that doesn’t happen there’s a real risk that the retailers will be forced to discount their seasonal margins away.”
Food & Drink – Joanne Denney-Finch, Chief Executive, IGD, said: “September’s sales mirrored the changing weather. There was sun at the start, which helped produce the best food and grocery sales week of the month. But this was followed by heavy downpours and the worst September storms for 30 years, with sales tailing off as the month progressed.
“Shoppers have been on an ‘optimism rollercoaster’ this year, feeling better about the future in the summer, but becoming more cautious as the nights draw in. Food companies will be hoping for milder weather through the rest of autumn and for themed events, such as Halloween, to help boost sales.”
Online* (Non-Food) – Stephen Robertson, Director General, British Retail Consortium, said: “August saw online sales growth fall to a record low as hearts and minds were captured by sporting triumphs rather than shopping.
“Sales in September were slow out of the starting blocks while households were absorbed with watching the Paralympics, but had a stronger finish, helped by autumnal weather and a slight improvement in customer confidence. While September’s growth rate is still below the average of the last year it’s double the rate in August and should accelerate as nights draw in and shoppers start to think about making headway on their Christmas lists.”
Online sales picked up throughout the month from the record low levels experienced in August during the Olympics. The month finished on a strong note but the September average remained below where online sales had been trending pre-August. However, there was some evidence that a greater proportion of website visits resulted in sales. The picture is mixed with some retailers reporting flat online sales and others seeing year-on-year growth greater than 30%. For many, online sales are still in their infancy while more established online channels are driving over a fifth of total sales for others.
3-Month Averages
The three-month weighted average is calculated by using the monthly weighted results for both food and non-food categories, and applying a weighting to the result to take into account the 4-4-5 week trading pattern for the months covered.
Food
The last burst of sunshine at the start of the month made for good sales of barbecue and picnic food like meat for grilling, quiches and ice-cream. Shopping for convenience – prepared meals, bagged salads – was also a characteristic of the new season, either to accompany Paralympics TV viewing or to get organised for the back-to-school transition. There was good demand for apples, even though blemished fruits appeared on the shelves as supply was limited due to the poor harvest. Towards the end of the month, baking goods became popular, a trend inspired by TV programmes. The crisper weather also motivated a shift towards traditional autumn food, ready meals, canned soups, meat for stews, cereals, treats and alcohol. With food & drink inflation at 3.1% in September, sales growth remains very low in volume terms.
Clothing
Clothing was a tale of two halves in September: it started the month very slowly when glorious sunshine, which had been largely absent during the summer, kept customers away from the shops. Conversely the cold end of the period, compared with warm weather at the same time last year, made for strong year-on-year growth in the last two weeks of September. This was particularly evident in Kidswear, which reacted strongly to the cooler temperatures. Children’s lines were the best performers in the category as some of the delayed back-to-school sales postponed in August materialised in September. Clothing & Footwear deflation remained high at the start of September, at 4.8% according to the BRC-Nielsen Shop Price Index (SPI). As the cold arrived, full-price seasonal items like knitwear and coats became the driver of growth. Lifestyle sport clothing was reported as losing some of its traction in favour of fashionable youth brands. Men’s clothing outperformed women’s even though the latter ended the month on a strong note.
Footwear
Footwear continues to be the top performing category for the fifth month in a row. September benefitted both from the delayed back-to-school timing at the beginning of the month and from the colder weather towards the end of the period, resulting in good footfall. Demand, therefore, was pretty strong across ranges, from transitional products to winter boots, and was better for children’s and men’s ranges than for women’s. Overall, boots were driving the trade and promotional activity was down.
Health and Beauty
The weather seems to have blown hot and cold in September to help Health and Beauty deliver another solid performance. Indeed both skincare – notably suncare which shoppers bought to enjoy the late summer sunshine – and Cough & Cold – a typical winter segment – performed well. Fragrance was boosted by new product launches, beauty was mixed among retailers while toiletries remained a battleground for promotions. Despite that, category sales growth was helped by inflation at 3.9%, according to the SPI.
Furniture and Flooring
Furniture and Flooring showed some signs of life in September with its best performance since the spring of this year. Some retailers commented that consumers started reacting to promotions for the first time in many months.
Home Accessories
The category was up against strong comparables last September and saw a worsening of the already unfavourable sales trend of previous months. The BRC-Nielsen SPI showed that the household utensils segment fell into deflationary territory in September, which partially accounts for the poor performance.
House Textiles
House textiles and decorative items had a relatively good performance, benefitting from the fact that people can more easily afford to give their home a makeover than to spend on big ticket purchases.
Other Non-Food
Other Non-Foods includes in particular:
– DIY/Gardening
Seasonal outdoor categories benefitted from the good weather at the start of the month. Big ticket items in the showrooms – kitchen, bathroom and bedroom – continued to suffer from the challenging economic backdrop. Instead, paint and decorative items were strong as people choose to improve their homes at low cost. Building materials and smaller tradesmen items were also weather supported.
– Electrical and Electronic
Tablets continued to drive the category, with back-to-school demand boosting computing. However retailers commented that September was a bit quieter than recent months, waiting for new products’ availability. Vision suffered from the counter-effect of the pre-Olympics TV purchases. Home appliances stood out, among them laundry, cooking and small electricals, like mixers, and vacuum cleaners.
– Leisure Goods
September was not an outstanding month, even though “50 Shades” still helped book sales and the launch of FIFA 13 boosted games.
Department Stores
September was a good month with a relatively slow start but a strong finish. “One day promotions” and mid-season sales generated good footfall. There was growth across all categories, not least fashion and accessories, without an increase in promotions. Premium lines were boosted by affluent middle-eastern customers staying after Eid. Even furniture, which had been a laggard in recent months, performed better.