Spending on clothes boosts UK retail sales in September

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UK retail spending increased at the fastest pace in six months in September, helped by higher clothing purchases, raising hopes for a busy festive season.

The value of retail sales increased at an annual rate of 2 per cent last month, up from 1 per cent in August and the fastest pace in six months, said the British Retail Consortium, a trade body.

The figures will be closely watched to see whether the drop in consumer confidence registered in September had translated into a slide in spending as retailers enter their busiest trading period ahead of Christmas.

Helen Dickinson, chief executive of the British Retail Consortium, said the strong reading came as non-food items performed “better than expected”.

“As autumn rolled out across the UK, shoppers sought to update their wardrobes with coats, boots and knitwear,” she said. However, “ongoing concerns of consumers about the financial outlook kept demand low for big-ticket items such as furniture and white goods”, added Dickinson.

BRC data are not adjusted for inflation, but the latest figures suggest sales volumes might have increased last month.

This is because some economists, including at Pantheon Macroeconomics, expect UK inflation to drop to 1.9 per cent in September after hitting 2.2 per cent in July and August. Official inflation figures for September will be published on October 16. BRC retail spending growth has been weaker than price growth almost uninterruptedly since late 2021.

“Household budgets are feeling slightly less constrained for some parents compared to last year,” boosting spending on children’s clothing, footwear and accessories, said Linda Ellett, head of consumer, retail and leisure at KPMG, which helped to compile the data.

The BRC figures chime with separate data from Barclays, which showed consumer spending rising by an annual rate of 1.2 per cent in September, following a 1 per cent increase in August and a contraction in the previous two months.

Barclays data, which tracks 40 per cent of the UK’s credit card transactions and was published on Tuesday, reported that spending on clothing rose by an annual rate of 4.5 per cent, marking the first uplift this year and its highest growth since July 2022.

Karen Johnson, head of retail at Barclays, said: “Retail’s recovery emerged as a bright spot in September.

“While shoppers remain cost conscious, it’s clear they’re responsive to retailers’ promotional activity,” she added.

Non-essential spending, such as entertainment and hospitality, rose by an annual rate of 2.7 per cent in September, the fastest rate this year, according to Barclays.

Boosted by demand for tickets for Oasis’s reunion tour, spending on entertainment rose by 14.4 per cent, the fastest in more than a year.

“There are encouraging signs that people feel confident in their ability to manage their household finances and take control of their festive spending,” said Johnson.