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The BRC's data showed like-for-like UK retail sales in September were up 0.7% from a year earlier. Photograph: Chris Ratcliffe/Bloomberg
The BRC's data showed like-for-like UK retail sales in September were up 0.7% from a year earlier. Photograph: Chris Ratcliffe/Bloomberg

Warm weather hits September clothing sales

This article is more than 10 years old
Food, furniture and clothing sales all down in like-for-like terms in September, according to latest data

Warm weather knocked demand for autumn clothes last month, leaving retailers suffering their worst sales performance so far this year, according to the British Retail Consortium.

The trade group's latest data showed like-for-like UK retail sales in September were up 0.7% from a year earlier. Retailers will be hoping for a pick-up as they enter the crucial Christmas period after food, furniture and clothing sales were all down in like-for-like terms last month. The modest growth that was clocked up in September was driven by electricals and leisure goods, according to the data compiled with KPMG.

BRC's director general, Helen Dickinson, said: "It has been the weakest growth so far this year if you exclude Easter distortions. Grocery sales have been particularly hard hit."

Online sales continued to grow in double-digits and helped to make up for weakness on the high street. The BRC has launched a new online retail sales monitor that suggests without the contribution of online, clothing and footwear sales would have declined in September. The new report showed online sales of non-food products in the UK grew 13.4% in September on a year earlier. Over the past three months online contributed a third of the total non-food retail growth, the BRC added.

Experts have highlighted the fact that British shoppers still remain cautious despite signs the economic recovery is gathering steam.

David McCorquodale, head of retail at KPMG, said: "These figures are a reality check and will make retailers nervous as we enter the run-up to Christmas. Unseasonably warm weather stifled sales of autumn and winter collections in September and the recovery in home-related items flattened. Consumers are still cautious about spending and are reluctant to restock their wardrobes with winter woollies until the weather cools."

"The stark fact is the retail recovery remains fragile and, in the lead up to Christmas, retailers, who are generally carrying less stock than in prior years, will need to manage promotional activity carefully to maintain margins."

The numbers follow signs of a slowdown in retail sales in the latest official data. Those August numbers showed a drop in sales on the month, confounding economists who had expected a rise to echo the recent run of upbeat indicators on the UK.

Releasing its latest economic forecasts on Tuesday, the British Chambers of Commerce (BCC) warns that it is "too early to declare that the recovery is now secure" and highlights risks remaining at home and abroad.

Overall, however, the business group's quarterly survey of more than 7,000 businesses is relatively upbeat and the BCC is now forecasting GDP growth of around 0.9-1.0% in the third quarter, compared with 0.7% recorded for the second quarter.

The survey shows improvements in most areas for both manufacturing and services compared with the second quarter.

The group's director general, John Longworth, warned last month that the recovery presented risks for Britain, given politicians could now shift their attention away from driving economic growth. He welcomed the report, suggesting more firms are optimisic about growing sales and hiring more staff.

"We need to ensure that this does not become an aberration, but rather the norm, particularly when the economic recovery is still facing external risks," he said.

"Investment is still a concern, and if we are to have a high-productivity, high-skill, high-wage economy then this needs to improve," he added, calling for more support for exporters and better access to finance.

HSBC has echoed those calls for more help for exporters with a list of policy recommendations for the government.

The bank says its global connections report shows UK business confidence is returning, with strong hopes for the the hi-tech manufacturing sector in particular. But it argues export growth has been stifled in recent years.

"We know from talking to our customers that many businesses with massive export potential are still holding back from looking overseas," said Alan Keir, one of HSBC's most senior executives in the UK.

HSBC has come up with eight recommendations. They include setting up "welcome centres" in key markets overseas and across the UK, and simplifying the business visa process to "make Britain more welcoming".

UK Trade and Investment chief executive, Nick Baird, said he welcomed the report.

"We are working hard to achieve our ambition of doubling exports to £1 trillion and getting 100,000 more UK companies exporting. For example, this week we have announced new support to help 1,000 UK food and drink companies start selling their products abroad," he said.

"We are also establishing British business centres in 20 key markets across the world and working in partnership with the British Chambers of Commerce to link them to business networks in the UK."

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