Business

Weak consumer confidence 'slows growth in retail sales'

Shoppers in Glasgow
Image caption The report said consumers were concerned about their future income levels

The rate of retail sales growth slowed in September, according to the British Retail Consortium (BRC).

Like-for-like UK sales growth - which excludes new store openings - was 0.5% last month compared with a year earlier, the trade body said.

This is half the 1% rate of growth the monthly BRC survey reported for August.

It said consumer confidence was "fragile" ahead of the government's spending review, and that this was hitting sales of some non-food items.

The BRC said consumers were cutting back on expensive purchases, such as fitted kitchens and bathrooms, and other items of household furniture.

It added that for the wider three months from July to September, sales of non-food goods were down 0.4% from a year earlier.

Food sales were up 2.1%, also from 12 months previously.

Stephen Robertson, director general of the BRC, cautioned that the growth in food sales was being exaggerated by high food inflation, which currently stands at about 4%.

"Sales growth continues to be poor," he said.

"We've now had six straight months of low growth thanks to persistently weak consumer confidence and worries about the future."

He added that there was little indication so far that shoppers were bringing forward expensive purchases to beat January's rise in VAT from 17.5% to 20%.

"It's clear people are cautious and major spending is largely on hold."

The government is due to outline its four-year spending review on 20 October, and is expected to announce substantial spending cuts as it continues to seek to reduce the UK's public deficit.

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