Warm autumn depresses UK retail sales

http://www.theguardian.com/business/2014/oct/23/warm-autumn-uk-retail-sales-ons

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Retail sales fell more than expected last month as shoppers put off buying new winter clothes amid the driest September on record.

Sales fell 0.3% over the month, driven down by falling sales of textiles, clothing and footwear according to the Office for National Statistics (ONS) as people shunned winter coats and jumpers to bask in the last of the warmer weather. Economists had forecast a smaller drop of 0.1%.

“Feedback from retailers suggested the fall was a result of unseasonably warm weather meaning consumers have delayed purchases of autumn and winter clothing,” the ONS said.

Alan Clarke, economist at Scotiabank, said the drop in sales was a sign that things were cooling off, but nothing sinister.

“There is probably a little more cooling off to come, but it is just that – cooling off not an arctic chill.”

Over the third quarter, retail sales grew by 0.3%, which was the slowest rate of quarterly growth in 2014. Clarke said weaker retail sales reinforced expectations that the wider economy had slowed in the third quarter. The ONS will publish the first estimate of gross domestic product on Friday, which is expected to show growth of 0.7% between July and September, lower than the 0.9% rate of growth achieved in the second quarter.

Retail sales over the year to September were up 2.7%, extending the run of year-on-year growth to 18 consecutive months - the longest period of expansion since May 2008.

The amount spent in the retail industry in September was 0.6% lower than in August, but 1.3% higher on an annual basis. The average weekly spend last month was £6.9bn.

Average shop prices fell by 1.4% last month compared with the same month last year, which was the largest fall since July 2009. The biggest driver of the fall was petrol stations, where prices fell 5.4%. Prices at food stores were also down, by 0.3%, the largest fall since December 2004.

Separate analysis by the ONS showed that spending in supermarkets has stalled, remaining essentially flat since May 2013. However, the quantity of supermarket purchases has been flat throughout the past decade.