UK high street sales slow in September, says CBI

UK high street sales slowed in September against the previous month, triggering fresh fears that the UK's consumer-led economic recovery is losing steam.

Nearly 50% of retailers reported higher sales volumes and 17% said they fell, giving a balance of 31% - below August's 37%, according to the Confederation of British Industry's (CBI) monthly Distributive Trades Survey.

Growth was broad-based across most sub-sectors, with department stores doing particularly well, but growth in the grocery sector eased to a balance of 25% compared with 60% in August. Chemists’ sales volumes fell on a year ago.

At the headline level, retail sales volumes are expected to rise strongly again in the year to October, but the pace of growth is set to ease further, the CBI said.

CBI economics director Rain Newton-Smith said: “Solid growth continues on the high street, with most sectors doing decent business and department stores performing particularly well. However, the pace of growth in the grocery sector tailed off significantly compared with the previous survey.

“Retailers are expecting sales to grow again next month, but at a steadier pace.”

Howard Archer at economic research group IHS Global Insight said: "The overall impression is that consumers are still pretty active, but have eased back a little on their spending after splashing at a strong rate overall through the first half of the year.

"However, it is questionable how strong consumer spending can be on a sustained basis until current very low earnings growth picks up appreciably. The prospect of interest rates starting to edge up before long may also be a concern to a significant number of consumers given that debt levels are still high."