Retail sales stay flat as shoppers hold back on spending

Sales on Britain’s high streets failed to grow for a second month in a row in September, as consumers continue to hold back on spending amid rising unemployment.

The Office for National Statistics (ONS) said sales volumes were flat on the month, leaving them 2.4% higher than September 2008. Analysts had expected a monthly increase of 0.5%.

Photograph: Alastair Grant/AP

Vicky Redwood, UK economist at consultants Capital Economics, said: “September’s official UK retail sales figures are surprisingly weak given the strong rise in the timelier CBI and BRC surveys. Overall sales in the third quarter as a whole still rose by a decent 0.9%. But this was only marginally stronger than the second quarter’s 0.8% increase, suggesting that retail won’t have contributed to the likely improvement in overall GDP growth.”

Official figures out tomorrow are expected to show that the UK economy grew in the three months to the end of September, dragging the country out of recession. However, Redwood believes that the outlook for sales remains pretty weak in the light of the looming fiscal squeeze and continued weakness of bank lending.

The ONS said that textile, clothing and footwear sales volumes fell 0.5% on the month, while sales of non-specialised stores, which includes department stores, were up by 0.5%.

Sales of household goods rose 0.3%, taking the annual fall to 0.9%, its smallest decline since December 2008.

September’s UK retail sales figures were ‘surprisingly weak’ as consumers continued to stay away.