UK retail sales on up amid hope of recovery
© The Herald
Originally published: 30.09.2009
UK retail sales showed year-on-year growth in September, on the Confederation of British Industry's measure, and a similar picture is expected in October.
The year-on-year sales growth in September follows four consecutive months in which volumes were lower than a year earlier, and will add to hopes the UK economy may have exited recession in the quarter ending today.
Subtracting the 36per cent of retailers which reported retail sales volumes in early September were lower than a year earlier from the 39per cent declaring they were higher, a net 3per cent reported an increase in the CBI's latest monthly distributive trades survey.
A net 3per cent forecast a year on-year increase in sales in October, with 36per cent expecting a rise and 33per cent a fall.
Vicky Redwood, UK economist at consultancy Capital Economics, said the number reporting a year-on-year rise in September is consistent with annual growth of retail sales of 4per cent on the Office for National Statistics data, compared with a rate of "2per cent or so seen recently" on these official figures.
Redwood added: "The UK CBI distributive trades survey suggests that retail sales - which were already holding up well - had a particularly good month in September. Admittedly, the survey only covered half the month, from August 27 to September 16. But if anything sales growth should have been boosted after this by the easy comparatives - confidence and sales dived after the collapse of Lehman Brothers on September 15 last year.
And the year-on-year rise in [Prior Hit]retail[Next Hit] sales in September was only narrow-based, with grocery and the footwear and leather sub-sector doing well but other categories experiencing a fall in volumes. Sales of household goods were particularly weak.
Andy Clarke, chairman of the CBI distributive trades panel, and chief operating officer of supermarket group Asda, said: "After such a difficult summer, it is encouraging to see signs that conditions in the [Prior Hit]retail sector are stabilising. However, with unemployment rising, wage growth low, and consumers building up their savings, spending is likely to remain subdued for some time."
Howard Archer, chief UK economist at consultancy IHS Global Insight, said: "The CBI distributive trades survey showed substantial improvement in September, thereby providing a major boost to hopes that the economy has returned to growth in the third quarter."