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KEY POINTS

  • Retail sales growth in September was consistent with that seen in recent months. By value, sales were up 4.2%, supported by very solid volume growth of 3.3%, according to the Office for National Statistics (ONS). 
  • Large clothing retailers, which represent the bulk of the clothing specialists sector, saw strong growth of 4.1% in September according to the ONS. Footwear retailers continued to decline. 
  • The grocery sector experienced a sequential slowing of growth, to 1.9% in September from 3.6% in August. Growth at Internet pure plays slowed, too. 

RETAIL SALES GROWTH BY SECTOR

ONS data show a retail sector that is growing at a very steady pace, and that growth is being supported by solid real-terms increases. Given the recent consistency, we are pencilling in solid, 4.5% year-over-year growth for the holiday season (November and December in aggregate). 

September was a good month for large clothing retailers and DIY stores while electrical appliance specialists saw growth accelerate. 

We continued to see apparently structural declines at footwear specialists and computers and telecoms stores. As we have noted previously, footwear specialists look to be losing out to Internet pure play retailers as well as sportswear stores that are riding the sneaker trend. In September, we saw further volatility in the reported figures for fragmented sectors such as beverage and tobacco specialists, specialist food stores and floorcoverings sectors. 

The ONS recorded total year-over-year shop-price inflation slowing to 0.9% in September, from 1.3% in August. At food stores, inflation eased to 1.6% in September from 2.0% in August. At nonfood retailers, inflation unwound from 0.6% in August to 0.3% in September. Automotive fuel inflation pulled back further, slowing from 11.3% in August to 10.3% in September—apparently confirming that we are past peak inflation for fuel. 

Online Retail Sales Growth

Total Internet retail sales were up 11.1% year over year in September, versus 14.5% growth in August. In September, Internet sales grew by 10.3% at food retailers, 15.7% at nonfood retailers and 8.3% at non-store retailers.

Internet retail sales accounted for 17.1% of all retail sales in September versus 16.8% in August. In September, e-commerce’s share of sales stood at 5.6% at food retailers and 13.1% at nonfood retailers, which included a 16.9% share of sales at clothing and footwear specialist retailers. 

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