UK retail sales fall in September, hit by weak clothing demand

[LONDON] British retail sales fell more than expected in September, adding to signs that the country's economic recovery is losing some of its pace.

Retail sales volumes fell 0.3 per cent on the month, their weakest performance since January, to show growth of 2.7 per cent on the year, the Office for National Statistics said.

Economists had expected a fall of 0.1 per cent on the month and a gain of 2.8 per cent on the year.

An ONS official said mild weather in September put shoppers off buying winter clothes, the main driver of the fall, but sales were weaker in several other sectors too.

In the third quarter, sales rose 0.3 per cent, the weakest increase over a three-month period since the September-November period of last year. It was the weakest figure for a calendar quarter since the start of 2013.

Spending by consumers was the main driver of Britain's strong economic recovery which began in mid-2013 but slow wage growth is straining the finances of many households.

A survey from the British Retail Consortium last week showed high-street spending suffered its biggest annual drop in nearly two-and-a-half years in September.

The ONS said clothing and footwear sales fell by 7.8 per cent in September from August, their biggest monthly fall since April 2012.

Prices in stores fell by 1.4 per cent in September compared with a year earlier, their steepest decline in more than five years, as prices fell across the board.

Prices in food stores fell for the first time since November 2004, probably reflecting a price war between supermarkets.

The retail sector accounts for nearly 6 per cent of the British economy.

A first estimate of British gross domestic product in the third quarter is due to be released on Friday. Economists expect growth slowed to 0.7 per cent from 0.9 per cent in the second quarter.

REUTERS