Essential reading for retailers and suppliers in the home improvement market

Retail sales growth remains slow

Published: 12 October 2010
UK retail sales values for September 2010 were up 0.5% on a like-for-like basis compared with September 2009, when sales rose 2.8%, according to the latest results from the BRC-KPMG Retail Sales Monitor.
Retail sales growth remains slow
Total sales were up 2.2% against a 4.9% increase for the same month last year.

BRC director general Stephen Robertson said: "Sales growth continues to be poor. We've now had six straight months of low growth thanks to persistently weak consumer confidence and worries about the future. What growth there was largely came from food with the performance helped by food inflation.

"Overall, non-food sales were down on a year ago for the first time since mid 2009. With VAT higher than it was last year, and pushing up sales values, it's an even worse performance than it looks. There is little evidence yet of major purchases being brought forward from 2011 to beat the coming VAT increase. Despite widespread discounting, sales of major items had the toughest time. It's clear people are cautious and major spending is largely on hold."

According to the report, wetter, cooler weather than last September hit gardening, particularly affecting plants, supplies and garden tidying. The autumnal weather also affected DIY categories such as paint, maintenance and lighting, but favoured indoor DIY and décor. The 'improve don't move' trend helped, with practical products benefiting most. However, larger projects continued to suffer from consumer uncertainty over personal finances.

Home accessory sales slowed sharply, said the report, showing virtually no growth. House textiles slowed less, benefiting from the cold weather which boosted bed linen and duvets. Lighting, cleaning and floorcare were also in customers' minds, while basic kitchen and dining essentials were helped by students returning to college. Underlying caution meant customers concentrated on practical and replacement items and put off discretionary purchases.

In furniture and floor coverings, sales fell further below their year-earlier level, with big ticket purchases particularly hard hit. Fitted kitchens, bathrooms and bedrooms struggled as people became more concerned over income prospects, although new ranges and promotions had some positive effect.

Non-food non-store sales strengthened further in September, up 19.1% on last year, but amid increased promotional activity.

Despite low sales growth over the past six months, new figures from Deloitte released today showed that retail administrations dropped 50% for the first nine months of the year compared with the same period in 2009.


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