Department stores enjoy record September sales surge
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Version 0 of 1. Shoppers flocked to UK department stores in September driving their strongest sales growth on record, according to the latest snapshot of the retail sector from the CBI. Chains such as John Lewis and House of Fraser outperformed the rest of the high street, with 100% reporting higher sales than a year ago. That was the highest-ever level according to the CBI’s distributive trades surveys, with comparable records starting in May 2010. Shoe shops, furniture retailers and carpet stores also reported strong sales growth in September, but the picture was less rosy for grocers, with sales sharply down on August. Chemists reported a fall in sales. Overall, consumer appetite for shopping eased back slightly this month. Of the retailers surveyed, 48% said sales volumes in September were higher than a year earlier, while 17% said they were lower. It gave a balance of +31%, weaker than August’s +37% but slightly better than the +30% forecast by City economists. “The overall impression is that consumers are still pretty active, but have eased back a little on their spending after splashing at a strong rate overall through the first half of the year,” said Howard Archer, chief UK economist at IHS Global Insight. He said high consumer confidence in recent months as well as rising employment and subdued inflation had all boosted retail sales in recent months. “However, it is questionable how strong consumer spending can be on a sustained basis until current very low earnings growth picks up appreciably. The prospect of interest rates starting to edge up before long may also be a concern to a significant number of consumers given that debt levels are still high.” There were signs in the latest distributive trades survey that retailers are feeling less upbeat about the immediate future than previous months. A balance of +25% of retailers expected sales to increase in the coming three months, the lowest since July. Meanwhile the volume of orders retailers had placed with their suppliers was at the lowest since December. Rain Newton-Smith, CBI director of economics, said: “Solid growth continues on the high street, with most sectors doing decent business and department stores performing particularly well. Retailers are expecting sales to grow again next month, but at a steadier pace.” Compared with the rest of Europe, the UK’s retail sector appears to be in rude health. According to data collated by the European commission and based on the CBI distributive trades survey for the UK, both retail sales and confidence are higher in Britain than other major European economies and the EU overall. |