MNI: UK BRC-KPMG: Retail Sales Edge Up As Xmas Draws Closer

--BRC October Like-for-Like Sales Up 0.1% y/y; Total Sales Up 1.3%

By Jamie Satchi

     LONDON (MNI) - UK retail sales posted a modest increase in October, but

consumers remain cautious heading into the final quarter of the year, the latest

British Retail Consortium-KPMG survey showed.

     --SALES UP, BUT UNSPECTACULAR 

     On a total basis, sales increased 1.3% y/y in October, up from 0.7% in

September and 0.2% this time last year. The result was above the 3-month average

of 1.1%, but below the 12-month average of 1.4%.

     On a like-for-like basis, sales increased by 0.1% y/y, up from -0.2% in

September and -1.0% last October.

     --FESTIVE BOOST?

     October's survey data comes as we head into the final two months of the

so-called 'golden quarter', when many retailers tend to register profits or

emerge into the 'black', so to speak.  

     Thus the modest consumption growth seen in recent months may be in

anticipation of heavy discounting due in the coming weeks, with Black Friday and

Cyber Monday promotions firmly in consumer's sights.

     That said, ongoing fundamentals -- modest real wage growth and

Brexit-related uncertainty -- continue to add to household's reluctance to

loosen the purse strings and could restrain activity. 

     "Brighter weather and the anticipation of better deals in the Black Friday

November sales have dampened demand for discretionary purchases. Moreover, low

real wage growth over an extended period has left consumers with less money in

their pocket, squeezing retailers' margins in the face of higher costs," said

Helen Dickinson OBE, Chief Executive of the BRC. 

     "The very real possibility of a no-deal Brexit presents a huge challenge

for retailers who must contend with the prospect of higher import prices, and

further drops to consumer demand," she added.

     --COMPUTING SALES STRONG

     The best performing category last month was computing, as in September,

followed by other non-food, jewellery and watches, food and clothing.

     "Grocery sales -- which have been a ray of light in recent months --

actually showed signs of restraint. However, clothing sales were more promising,

with the colder weather towards the end of the month prompting a wardrobe

rethink," said Paul Martin, UK Head of Retail at KPMG.

     Total food sales fell to 2.3% in the three months to October, the lowest

reading since the three months to June, having helped hold up activity during

the interim period.

     Non-food sales extended its sluggish run of form, up just 0.1% in the three

months to October, having contracted by 0.6% between July and September.  

--MNI London Bureau; +44 203-586-2226; email: jamie.satchithanantham@marketnews.com

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