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Press Release

SALES UP AS TEMPERATURES AND PRICES FALL

· UK retail sales rose 3.0% on a like-for-like basis, compared with September 2006, when sales were up 2.4%.

· The three-month trend rate of growth was unchanged from August, at 2.1% for like-for-like sales, and 4.0% for total sales, reflecting the continuing growth of retail space.

· The colder end to the month helped clothing and footwear sales to pick up further from a poor July. Food sales maintained August’s growth but were less good than earlier in the year. Furniture and larger homewares were weaker but health and beauty had another good month.

· Consumer confidence is being hit by interest rate rises and financial worries after the banking crisis. Consumers are now more cautious about making major purchases.

Kevin Hawkins, Director General, BRC comments:

"Sales were slightly better than anticipated for two reasons – firstly, the weather gave a much-needed fillip to the clothing and footwear sectors, but secondly and more importantly, price promotions and cuts in base prices were widespread across all sectors, resulting in an unprecedented number of buying opportunities."

Helen Dickinson, Head of Retail, KPMG comments:

"Finally! The clothing and footwear retailers will be breathing a small sigh of relief, after a reasonable, if not delayed, start to the Autumn/Winter season.

"Performance across all sectors improved as the month progressed, but with overall like-for-like growth of 3%, the third quarter has underperformed compared with the first two quarters of the year.

"The real acid test will come in the lead up to Christmas, so there is no time for complacency - there is also no doubt that it will be challenging for many retailers, as the low growth backdrop looks set to continue.

"However, for the moment at least, consumer spending patterns are not being affected by the wider credit crunch issues."

Like-for-Like v Total Sales

The 'like-for-like' figure shows how much consumers are spending on a comparable basis, in the same stores year on year.

It strips out the effect of expansions, new shop openings and closures on retailer’s sales or profits.

It is this figure that is looked at by the city and analysts as an accurate and comprehensive measure of the industry's performance, as it removes any increase in retail floorspace.

The 'total' figure, which incorporates these increases, is not a true reflection of retail spend, but merely a reflection of industry growth. The like-for-like figure also monitors the increase or decrease at stores that have been open for at least one year.



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British Retail Consortium

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