Introduction: UK retail sales growth slows despite tech boom
Good morning, and welcome to our rolling coverage of business, the financial markets and the world economy.
Growth in retail sales across Great Britain has slowed, as consumers snapped up technology but cut back on supermarket spending.
Sales volumes grew by 0.3% in September, new data from the Office for National Statistics shows, down from 1.0% growth in August.
That’s stronger than expected – City economists had predicted a 0.3% fall for the month.
Computers and telecommunications retailers grew strongly in the month – perhaps due to students buying PCs for the new term? – but were partly offset by decreases in food sales.
The ONS says:
The strongest sub-sector growth was from other non-food stores, which rose by 5.5% over the month to September 2024. Within “other non-food”, computer and telecommunications retailers had the strongest contribution to growth.
ONS senior statistician Hannah Finselbach says:
“Retail sales grew in September as tech stores reported a notable rise in sales. These were only partially offset by a poor month for supermarkets, where retailers said bad weather and households continuing to cut back on luxury food items hit sales.
“Looking at the broader picture retail sales increased across the third quarter as a whole, with growth seen from all main shop types.”
The agenda
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Today: Chancellor Rachel Reeves holds talks with the bosses of major City firms
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7am BST: UK retail sales for September
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9.30am BST: UK insolvency statistics for September
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1.30pm BST: US building permit and housing starts data for September
Key events
Deloitte: Back to school boost to retail sales
Oliver Vernon-Harcourt, head of retail at Deloitte, said:
“A back-to-school boost saw retail sales rise for a third consecutive month, with sales of computers and additional clothing and footwear bolstering growth. While many consumers continue to hold back on purchasing big ticket items, the sale of smaller non-essential luxuries has propped up sales values.
“Consumer confidence continues to improve, now returning to pre-pandemic levels for the first time. While discretionary spending has seen improvement in the last quarter, with some consumers allowing budget for little treats and summer holidays, challenges remain. Some consumers are spending more, but retailers remain cautious in the sector’s most crucial few months of the year.
September’s surprise rise in retail sales suggests that household fears about possible tax rises in the Budget are not feeding through to their spending decisions yet, says Alex Kerr, UK economist at Capital Economics.
Kerr has analysed today’s data, and says:
The rise in retail sales was broad based with sales increasing in five of the seven sub-sectors. Department stores and ‘other’ stores posted 1.9% m/m and 5.5% m/m gains, with the ONS citing that computers and telecommunications retailers performed particularly well.
This suggests that despite the decline in consumer confidence in September, households appear to be increasingly willing to spend on big ticket purchases as the drags from higher inflation and interest rates continue to fade. That said, food sales fell back by 1.9% m/m, although some of that may reflect the unwinding of the 2.1% m/m rise in August.
Fuel sales also fell by 0.1% m/m, despite the 4.0% m/m decline in petrol pump prices.
Retail sales growth shows economy still ‘robust’
Neil Birrell, chief investment officer at Premier Miton Investors , says the rise in retail sales is a good sign for the economy:
“The wet weather didn’t deter the British public spending their money in September, as shown by stronger than expected retail sales.
This runs contrary to what consumer confidence data is telling us and indicates that wage growth is an important factor. The consumer sector is very important within the economy and even though this is just one month’s data, it suggests the economy is more robust than was thought.”
FYI, UK #retail sales volumes rose 0.3% in September – not much but the markets had expected a 0.3% fall.
Another reminder then that the economic recovery still has plenty of positive momentum – and is now more broadly based – despite the #Budget worries 👍 pic.twitter.com/isrpQBcyq1
— Julian Jessop (@julianHjessop) October 18, 2024
Introduction: UK retail sales growth slows despite tech boom
Good morning, and welcome to our rolling coverage of business, the financial markets and the world economy.
Growth in retail sales across Great Britain has slowed, as consumers snapped up technology but cut back on supermarket spending.
Sales volumes grew by 0.3% in September, new data from the Office for National Statistics shows, down from 1.0% growth in August.
That’s stronger than expected – City economists had predicted a 0.3% fall for the month.
Computers and telecommunications retailers grew strongly in the month – perhaps due to students buying PCs for the new term? – but were partly offset by decreases in food sales.
The ONS says:
The strongest sub-sector growth was from other non-food stores, which rose by 5.5% over the month to September 2024. Within “other non-food”, computer and telecommunications retailers had the strongest contribution to growth.
ONS senior statistician Hannah Finselbach says:
“Retail sales grew in September as tech stores reported a notable rise in sales. These were only partially offset by a poor month for supermarkets, where retailers said bad weather and households continuing to cut back on luxury food items hit sales.
“Looking at the broader picture retail sales increased across the third quarter as a whole, with growth seen from all main shop types.”
The agenda
-
Today: Chancellor Rachel Reeves holds talks with the bosses of major City firms
-
7am BST: UK retail sales for September
-
9.30am BST: UK insolvency statistics for September
-
1.30pm BST: US building permit and housing starts data for September
