10427 The Retailer Autumn 2018_Final Draft Pages

BRC NIELSEN SHOP PRICE INDEX September 2018 SECOND MONTH OF SHOP PRICE INFLATION Period Covered: 03 - 07 September 2018

Helen Dickinson OBE, Chief Executive, British Retail Consortium:

• After five years of deflation, for the second consecutive month Shop Prices increased on the previous year. In September, Shop Price inflation inched up to 0.2% from 0.1% in August. • Non-Food deflation eased slightly in September to 0.9% from 1.0% in August. • Food inflation was steady in September at 1.9%. • Fresh Food inflation accelerated to 1.6% in September from 1.5% in August. • Ambient Food inflation slowed to 2.4% in September from 2.5% in August. • September was the second month in which Shop Prices recorded an increase, following a span of over five years of deflation. As expected, Food prices remained inflationary, the result of unusual weather patterns in the first half of the year. Non-Food deflation decelerated, with retailers less aggressive in discounting compared to a year ago. • In September, UK retail sales decreased by 0.2% on a like-for-like basis from September 2017, when they had increased 1.9% from the preceding year. • On a total basis, sales increased 0.7% in September, against an increase of 2.3% in September 2017. This is the lowest since October, excluding Easter distortions, and below the 3-month and 12-month averages of 1.2% and 1.3% respectively. • Over the three months to September, In-store sales of Non-Food items declined 2.7% on a Total basis and 4.0% on a Like-for-like basis. This is in line with the 12-month Total average decline of 2.7%. • Over the three months to September, Food sales increased 2.3% on a like-for-like basis and 3.4% on a total basis. This is below the 12-month Total average growth of 3.7%. • Over the three-months to September, Non-Food retail sales in the UK decreased 1.6% on a like-for-like basis and 0.6% on a Total basis. This is in line with the 12-month Total average decrease of 0.5%. September Non-Food sales remained in decline. • Online sales of Non-Food products grew 5.4% in September, against a growth of 10.7% in September 2017, the second-

“Overall shop prices were inflationary for the second month in a row in August, the first time in five years that prices have risen in two consecutive months. “Global commodity conditions, in particular oil prices, would indicate that there are likely to be further inflationary pressures in the short to medium term which could lead to further price rises. “This would be worrying enough for hard-pressed British consumers if we weren’t staring down the barrel of a “no-deal” Brexit. Food prices alone have now been inflationary for more than a year and the BRC estimates that consumers could face up to a 29% increase in prices of products such as beef in the event of a “no-deal.” “Time is running out for the Government to deliver a Brexit deal with a workable backstop arrangement and a clear transition period. This is not good news for UK shoppers who out of all the stakeholders in the Brexit process ultimately have the most to lose.” best growth of 2017. This is the lowest growth since January and below the 3-month and 12-month averages of 6.7% and 7.1% respectively. Online penetration rate increased from 22.7% to 24.2% in September 2018. Helen Dickinson OBE, Chief Executive, British Retail Consortium: “These figures lay bare the difficult operating environment for the retail industry. After a challenging August, constrained consumer spending in September has resulted in the weakest sales growth for five months. “Retail represents 5 per cent of the economy and pays almost 25 per cent of the business rates bill and this disproportionate cost burden is especially hard to bear given the current trend in sales. The effect can be seen in the fact that there have been 3,200 UK store closures in the past three years. “The Government has said it wants to “back business” and retailers are waiting to see if this is just talk or if there will be meaningful action - like a freeze in business rates in the Budget.”

SEPTEMBER SUFFERS FROM SUMMER HANGOVER Covering the five weeks 26 August – 29 September 2018

6 | autumn 2018 | the retailer

Made with FlippingBook flipbook maker