Retail sales fell in September

It will come as no surprise that UK retail sales are growing at their slowest annual rate in two-and-a-half years, figures from the Office for National Statistics (ONS) show. High Street sales fell by 0.4% in September, taking annual growth to 1.8%, from 3.3% a month earlier. However, it was better than the 0.9% monthly fall forecast by analysts.

Spending on clothing fell in September, the ONS said. The data followed a surprise rise in August retail sales, which has been revised to 1.1%.

In recent weeks, several retailers have reported a fall in sales, including Marks & Spencer who saw saw like-for-like sales fall 6.1% in the 13 weeks to 27 September, the Arcadia Group, which owns Top Shop, saw like-for-like sales fall 2.8% from 2007 and JJB Sports, the retailer and health club group, saw sales tumble 5.6% to £344.7m in the six months to the end of July.

“As we enter our first recession for 16 years, it goes without saying that times will remain incredibly tough for retailers over the remainder of 2008, and probably all of 2009,” said Gavin George, head of retail at Ernst & Young. “Christmas will be painful for much of the sector as consumers continue to batten down the hatches,” George added.

The official government data is less bleak than a report by the British Retail Consortium out last week, which pointed to a 1.5% sales fall in September. The ONS explained the disparity, saying its figures were based on a larger sample of retailers across a broader range of retail sectors.

Image: empty wallet