The Office for National Statistics (ONS) estimates that the quantity bought in the retail industry in September decreased by 0.3 percent when compared to August. The good news however is that it had increased by 2.7 percent when compared with September 2013.
This is also now the 18th month in which the year on year growth figure has been positive. The ONS also says that it is the longest period of sustained year-on-year growth since May 2008, when there were 31 periods of growth.
On a rolling three month basis the growth rate was 0.3 percent, but the last three month period was the slowest seen throughout 2014.
Retailers suggested that unseasonably warm weather led to people delaying the purchase of cold weather clothing. This in turn led to textile, clothing and footwear sales declining by 7.8 percent in September compared to August and by 4.1 percent when compared to the same time last year, which was the main downward pressure on September’s retail sales numbers.
When looking at the amount of money spent, it decreased in September by 0.6 percent compared to August but was 1.3 percent higher than in September last year.
Average store prices fell by 1.4 percent in September compared to September 2013, the largest fall since July 2009.
Commenting Martin Beck, senior economic advisor to the EY ITEM Club, said:
“The quarterly slowdown in retail sales growth is likely to be reflected in the latest GDP figures, due out tomorrow. We expect GDP for Q2 to have dipped to 0.8%.
“Admittedly, some of this weakness may prove temporary. Clothing sales fell by 4.1% in September, compared with a year ago, which could partly be the result of the unusually mild weather and delayed demand for autumn clothing lines.
“But there has been a notable loss of momentum through the summer, suggesting there are a number of other factors in play. Earnings growth remains weak and is still a little lower than inflation, so spending power remains under pressure. And with the savings ratio already very low, the ability of consumers to finance spending by saving less is diminishing.
“On a more positive note, however, the continued lack of price pressures will provide some support to spending power, while there are some early signs that wage growth is starting to nudge up. With the MPC looking likely to leave rates on hold until next year, this also points to a brighter outlook for consumers over the months ahead.”