Sales were unchanged over the month of September - economists had expected a rise of 0.4%m/m. The unchanged result for September comes after falls in July and August, and extends the period of weakness seen throughout much of this year. Indeed, sales values have fallen in five of the last 10 months.
Sales growth last month was best in food retailing (up 0.6%), department stores (up 2.1%) and for cafes and takeaway food (up 0.3%), but fell in the other categories. The largest falls were in “other” retailing (down 1.7%), clothing and footwear (down 0.7%) and household goods (down 0.4%). Sales growth over the year to September slipped to just 1.4%oya, the weakest rate of expansion since mid-2013.
There was better news in the volume of spending. Indeed, after adjustment for inflation, retail sales volumes rose 0.1%q/q in Q3, but this comes after a 1.5% rise in the previous quarter. Unlike the nominal monthly sales outcome, however, this was slightly better than economists had expected.
It’s been an unusually tough period for retailers. Consumers are dealing with persistent headwinds in the form of rising energy prices and the weakest wages growth ever. Many with heavy debt burdens also may be adjusting their spending in anticipation of rising interest rates next year. At least the physical labour market is doing well, with the jobless rate recently having slipped to a four year low.