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Retailers have urged the government to secure a Brexit deal with the EU after their latest health check of high street and online spending showed the weakest growth since the survey was launched in the mid-1990s.
The British Retail Consortium – the trade body for shops, stores and digital suppliers of consumer goods – said a 1.3% drop in sales in September meant the annual increase in activity had dropped to just 0.2% – its lowest level since 1995.
Although wages are currently rising faster than prices, retailers said the BRC’s monthly survey with KPMG showed that consumers were reluctant to part with their money at a time of heightened political and economic uncertainty. Official figures from the Office for National Statistics have been less downbeat than surveys from the BRC and the CBI.
The BRC said the slowdown in spending was evident both in stores and online. It added that food sales had been holding up better than non-food spending.
Helen Dickinson, the BRC’s chief executive, said: “With the spectre of no deal weighing increasingly on consumer purchasing decisions, it is no surprise that sales growth has once again fallen into the red. Many consumers held off from non-essential purchases, or shopped around for the bigger discounts, while the new autumn clothing ranges suffered from the warmer September weather.
“The longer-term prospect continues to be bleak, with the 12-month average once again plumbing new depths at a mere 0.2%. Online non-food sales growth was the lowest on record, though still compared favourably to the decline in growth at physical stores.
“With four months of negative sales growth since March, the ongoing political gridlock surrounding Brexit is harming both consumers and retailers. Clarity is needed over our future trading relationship with our closest neighbours, and it is vitally important that Britain does not leave the EU without a deal.”
Paul Martin, the UK head of retail at KPMG, predicted a period of increased promotional activity to allow retailers to clear surplus stock. The need to cut prices to attract business did not bode well for retailers desperately trying to make up for lost ground after several difficult months.
“Retailers’ focus needs to be on cost and efficiency with only the leanest and most efficient operations coping with this extreme test of endurance,” he said.
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