Retail sales boost as shoppers go to town
CONSUMERS flexed their financial muscle to boost Britain’s economic prospects as retail sales grew at the fastest for nearly two years in the third quarter.
Official figures showed retail sales volumes rose 1.8 per cent in the three months to September, up from 1.1 per cent in the three months to June. Compared with the same period last year, volumes were up 5.4 per cent.
The sector, which along with the dominant services industry has offset more sluggish performances by manufacturing and construction, is set to make a positive contribution to economic growth in the third quarter.
Kate Davies at the Office for National Statistics said: “Retail sales in September were unchanged from August, but the underlying trend is one of strength, suggesting consumer confidence has remained steady since the referendum.
“There was some variation between store types, clothing stores saw a fall in the quantity bought in part due to rising prices and a warm September.”
Economists have warned, however, that this could represent a “last hurrah” for the high street as retailers pass on higher import costs to shoppers.
Average store prices fell 1.1 per cent in September compared with a year ago, the smallest drop since August 2014. Unseasonal weather and price hikes dented takings at fashion chains, which along with footwear and textiles suffered a 5.4 per cent drop in sales volumes in September from the previous year. The amount spent was down 5 per cent. Online spending jumped by 22 per cent from the previous September.
Martin Beck at the EY ITEM Club, said: “A key factor behind the strength of volume growth over the past couple of years has been deep discounting. But today’s data offers confirmation that we are moving away from this environment.
“Inflation is likely to pick up sharply, as the impact of the depreciation in the value of sterling steadily passes through to consumer prices. The degree to which retailers pass on rising import costs remains to be seen, but there is a sense that the strong third quarter figures for retail sales volumes are likely to represent a last hurrah for the high street.”