UK Economy
UK retail sales growth at 5-year high
By Finfacts Team
Oct 17, 2013 - 4:19 PM

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n September 2013 the volume of UK retail sales rose by 2.2% compared with September 2012 and by 0.6% compared with August 2013. With three month-on-three month growth rates increasing for seven consecutive months these estimates show an underlying trend of growth in the retail industry.

The Office for National Statistics said [pdf] the quarter-on-quarter, the quantity bought in the retail industry increased by 1.5%. This is the largest quarter-on-quarter rise since March 2008 when the economy as a whole was at its peak, before the economic downturn.

Of the four main retail sectors, non-food stores and non-store retailing saw an increase in the quantity bought in September 2013 compared with September 2012, with increases of 3.6% and 19.1% respectively. Food stores and petrol stations (including supermarket petrol stations) saw falls in the quantity bought of 0.6% and 2.4% respectively over the same period.

The amount spent in the retail industry continued to increase, in September 2013 the amount spent increased by 3.2% compared with September 2012 and by 0.5% compared with August 2013. Non-seasonally adjusted data show the average weekly spend in September 2013 was £6.8 billion.

Store price inflation as measured by the implied price deflator showed that price increases in the retail industry continued to slow, with average prices increasing 0.9% year on year compared with 1.6% in August 2013.

James McGregor, director of the retail consultants, Retail Remedy commented:  "Newly confident consumers have given the high street a high five.

"The retail market continues to go from strength to strength, although its return will have left many economists scratching their heads given where wage inflation is at," he said. ""The long run of warm weather in late summer was certainly a catalyst for growth, but now the baton has been passed to resurgent levels of consumer confidence."

McGregor added: "We've had a spate of upbeat economic data and people can hear and see this. More importantly, they can sense that things are improving. Because people feel more confident about the future, they feel more confident to spend.

"It's also a case of people finally starting to spend some of the money they have squirrelled away over the past five years.

"Online sales continue to go through the gears. For average weekly spend online to be a fifth higher than it was last year drives home just how integral to our lives the internet has become. Retailers with a multi-channel presence, with the internet at its core, are best placed to thrive in the modern retail environment."

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