Belfast Telegraph

Back-to-school drive boosts sales, but retailers wary ahead of Christmas rush

By Jamie Grierson

While retailers large and small wrangled in Northern Ireland, latest data gave an unexpected boost to the sector.

Back-to-school purchases of laptops and gadgets helped push UK retail sales up last month but failed to ease fears over the sector in the run-up to Christmas.

Retail volumes in September grew 0.6% month-on-month, following a downwardly revised 0.4% drop in August, the Office for National Statistics (ONS) said.

Economists had predicted flat sales. But quarterly figures, which the ONS said provide a clearer insight into the health of the sector, showed sales were down 0.2% as clothing and food trade tumbled over the three-month period.

Stephen Robertson, British Retail Consortium director general, said: "Christmas has always been the most important time for retail but this year is going to be particularly critical as businesses look to make up lost ground."

Retailers have provided a mixed picture this week, with Debenhams unveiling a major stores expansion plan after reporting a 10% rise in profits, while Argos saw its half-year profits slide 94% as sales of TVs and video games tumbled.

The unseasonal weather at the end of the month took its toll on the clothing sector, which saw a 0.7% drop in sales month on month, but the heatwave did not have the expected positive impact on food.

The improved September figures will be a slight boost to recovery hopes, as retail constitutes a significant proportion of the country's powerhouse services sector.

But the broader three-month picture is bleak as the retail sector feels the force of the consumer spending squeeze, triggered by high prices, muted wages and rising unemployment.

The ONS said the drop in volumes in riot-hit August was worse than expected, after methodological changes saw the figure downgraded to a 0.4% fall, from a first estimate of a 0.2% decline.

Howard Archer, chief UK and European economist, said: "Despite September's decent retail sales growth, it is difficult to be optimistic about the prospects for consumer spending."

However, second-hand stores, which can include charity shops and antique dealers, had a large upward effect.

Food sales were unexpectedly flat as the 28C-plus temperatures at the end of the month had little effect, the ONS said.

But within the food figures the ONS said there was evidence that smaller stores were showing better volume growth than larger stores.