BRC: September sales suffer summer hangover

In Industry Comment, Industry News On

The British Retail Consortium (BRC) has reported the latest sales figures for September, with total sales up 0.7% year-on-year but like-for-like sales seeing a 0.2% decline over the same period.

The total three-month average for non-food sales also declined 0.6% against the same time last year.

BRC chief executive Helen Dickinson OBE commented: “These figures lay bare the difficult operating environment for the retail industry. After a challenging August, constrained consumer spending in September has resulted in the weakest sales growth for five months.

“The retail industry pays a disproportionate amount of tax.  It represents 5% of the economy but pays 10% of business tax and almost 25% of business rates.  A tax system skewed towards high taxes on people and property is contributing to store closures and job losses and is stalling the successful reinvention of our high streets.

“Taxes apply to all businesses, so the answer is not additional taxes solely on the retail industry. The Government urgently needs to reduce the business rates burden and create a tax system fit for the 21st century that more fairly distributes taxes right across the economy.”

KPMG UK head of retail Paul Martin added: “Like-for-like retail sales in September were down 0.2% on this time last year, but then last year consumers were remaining more defiant in the face of Brexit and shopping regardless.

“Grocery continued to perform, but growth in the category retreated in September. The non-food categories however, continued to disappoint. The historically reliable back-to-school push did not elevate apparel sales. Instead the latest tech launches were a rare source for optimism.

“Online retail continued to fare better. Even clothing sales managed to grab the attention of those browsing the web to refresh their wardrobe.

“The final golden quarter of the year marks the ultimate test for many players, but retailers must also successfully navigate: the upcoming government Budget, Black Friday, Christmas, and of course Brexit.”

Fujitsu UK and Ireland director of retail Adrian West believes retailers need to adapt to the prevailing conditions.

“With unsteady consumer confidence and external factors such as weather and events playing a significant role in spending habits, the time is now for retailers to harness the opportunities they do have in their control,” he said.

“An unpredictable environment can be tempting to default to tried-and-tested tactics for boosting sales, such as discounting. However, the underlying trends shaping the market are deep-rooted and durable, with digital disruption, shifting consumer confidence and behaviour playing a definitive role. Retailers need to make fundamental changes to how they operate and anticipating customers’ desire for a seamless and convenient shopping experience is just one approach that can help them transcend these conditions.

“With talk of Amazon this week looking to acquire retail space in the UK and set down firm roots, it’s never been more important to offer a seamless in-store and offline experience which allows consumers to shop how they please. We even found that 75% of consumers said if Amazon had a physical store, it would quickly become their preferred store to shop in and that day is fast approaching. Retailers need to take note and ensure that they too are providing their customers with the relevant channels for their shopping needs and not run the risk of freezing out customers for failing to do so.”

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