Cold weather heats up high street spending

By GARETH MACKIE
Published on 09/10/2012 00:00

Colder weather helped drive a recovery in high street sales last month, as figures released today raise hopes that the wider economy could return to growth in the third quarter.

The British Retail Consortium (BRC) says shoppers bought boots, coats and knitwear as the weather cooled, pushing sales volumes up 1.5 per cent on a like-for-like basis compared with September last year. However, ongoing challenges in the housing market saw sales of home accessories fall at their fastest rate for three years.

Stephen Robertson, director general of the BRC, said: “Customers are still cautious but less fearful than they were. The squeeze on disposable incomes has eased for some and, along with lots of discounts, left them feeling it’s time to stop postponing spending.”

Economists said the slowdown in the rate of inflation, which has more than halved to 2.5 per cent since last year, has lifted consumers’ spending power, although earnings are still growing less slowly than prices.

Today’s report echoes an upbeat high street sales report from accountancy firm BDO yesterday, which showed fashion sales rose 3 per cent in September as consumers snapped up warmer clothing.

Howard Archer, chief UK and European economist at IHS Global Insight, said the BRC survey would raise hopes that there was a bounce in gross domestic product (GDP) in the third quarter.

He said: “Given that consumer spending accounts for some 63 per cent of GDP on the expenditure side, the role of the consumer is vital to growth prospects.”