Retail sales rose by 1.9% in September, compared to the same period last year, but despite this “welcome” growth, the British Retail Consortium (BRC) has warned that the increase is largely due to rising prices on the high street.
The BRC figures represent the second consecutive month of growth, however Helen Dickinson, chief executive of the trade body, warned that while positive on the surface, the results reflect the impact of price rises.
“Looking beneath the surface, we see that much of this growth is being driven by price increases filtering through, particularly in food and clothing, which were the highest performing product categories for the month,” she said.
“Retailers have worked hard to keep a lid on price rises following the depreciation of the pound, but with a potent mix of more expensive imports and increasing business costs from various government policies, something had to give at some point.”
Essentials dominated consumer spending, with customers opting for winter coats and back-to-school items over more expensive purchases. Online also performed well, with double-digit growth.
Dickinson further warned on the possible rise of interest rates and appealed to the government to control costs. “With stronger headwinds brewing, it’s vital government keeps a tight lid on those costs under its control, which impact on retailers, the cost of doing business and ultimately consumers,” she said. “The Chancellor has a great opportunity to do just that in his upcoming budget by not adding yet another rise on the business rates bill of every retailer in the country.”