Retail sales, Great Britain: September 2018

• In the three months to September 2018, the quantity bought in retail sales increased by 1.2% when compared with the previous three months, with strong sales in “other stores” and online retailing.

• The increase of 3.9% for the quantity of goods bought in “other stores” for the three months to September 2018 was the largest overall contributor to the growth in total retail sales, due largely to strong growth in watches and jewellery stores.

• In September 2018, the quantity bought declined by 0.8% when compared with August 2018, due mainly to a large fall of 1.5% in food stores; the largest decline in food store sales since October 2015.

• When compared with September 2017, the quantity bought in September 2018 increased by 3.0%, with growth across all sectors except department stores.

• Online sales as a proportion of all retailing fell slightly to 17.8% in September 2018 from the 18.0% reported in August 2018, yet food stores and clothing stores both reported record proportions of internet retail at 5.8% and 18.2% respectively.

Commenting on today’s retail sales figures for the three months to September, ONS Head of Retail Sales Rhian Murphy said:

“Retail continued to grow in the three months to September with jewellery shops and online stores seeing particularly strong sales. This was despite a stark slowdown in food sales in September, following a bumper summer.”

This bulletin presents estimates of the quantity bought (volume) and amount spent (value) in the retail industry for the five-week period 26 August 2018 to 29 September 2018.

Unless otherwise stated, the estimates in this release are seasonally adjusted.

The Retail Sales Index (RSI) measures the value and volume of retail sales in Great Britain on a monthly basis. Data are collected from businesses in the retail industry and the survey’s results are used to produce seasonally adjusted monthly, quarterly and annual estimates of output in the retail industry at current price and at chained volume measures (removing the effect of price changes).

The RSI is an important economic indicator and one of the earliest short-term measures of economic activity. It is used in the compilation of the national accounts and widely used by private and public sector institutions, particularly by the Bank of England and Her Majesty’s Treasury to assist in informed decision- and policy-making.

Summary information can be found in the RSI Quality and Methodology Information report.

In September 2018, both the amount spent and the quantity bought in retail sales showed strong growth when compared with the same period a year earlier.

In contrast, as the only measure to show a decline, the monthly growth rate fell by 0.6% in the amount spent and by 0.8% in the quantity bought.

Comparing the three months to September with the previous three months, the amount spent increased by 1.7%, while the quantity of goods bought increased by 1.2%.

Looking at the longer-term trend for the monthly and the three-monthly path can explain the contrasting picture seen for these movements (Figure 1).

Figure 1 shows the rolling three-month on three-month index against the more volatile monthly path for the quantity bought.

From January 2010, spending in retail stores remained relatively stable for a period up to March 2013. From April 2013, the quantity of goods bought began to increase at a steady rate to the end of 2016, and with a short period of contraction at the beginning of 2017, the underlying pattern returned to a slower rate of growth to March 2018.

From April 2018, stronger growth is seen with a continued increase in the three-month on three-month movement. The monthly fall to September 2018 follows strong monthly growths in previous months, but is yet to return to a similar level as experienced before the increased summer sales.

In September 2018, all four main sectors contributed positively to the growth in both the quantity bought and amount spent at 3.0 and 4.9 percentage points respectively.

The main contribution to both the amount spent and the quantity bought came from non-food stores at 2.1 and 1.9 percentage points respectively.

The quantity of petrol sold increased by 0.1 percentage points, though not as drastically as the amount spent at 1.1 percentage points.

Overall, there has been a negative contribution to month-on-month growth, with the quantity bought contributing negative 0.8 percentage points and the amount spent contributing negative 0.6 percentage points.

Food stores were the largest contributor towards the overall fall, with the amount spent and quantity bought both having a negative percentage point change of 0.6.

The quantity bought at petrol stations also made a negative contribution on the month at negative 0.1 percentage points, while the amount spent had no contribution to growth.

Similarly, non-food stores provided no contribution to growth in the amount spent or quantity bought.

Figure 4 highlights that essential items, typically bought in food stores and petrol stations, reported a fall in growth during the three months to September 2018 when compared with the previous three months. Food stores fell by 0.1% while petrol stations saw a fall of 0.7%. Consequently, the growth in the quantity bought in this period came from non-essential items.

This growth in non-essential items can be seen across all sectors except for department stores at negative 0.5%. Non-store retailing continued its pattern of strong growth at 4.8%, while “other stores” also reported their strongest growth since the three months to August 2017 at 3.9%.

Figure 5 shows growth within each store type included in “other stores”.

Figure 5 shows the store types included in “other stores”. Overall, this sector saw growth of 3.9% for the quantity of goods bought in the three months to September 2018. This sector was the largest overall contributor to the growth in total retail sales within this period.

The largest contribution to the growth seen in “other stores” came from retailers within the watches and jewellery sector, with a reported growth of 2.0%. Feedback from these stores claimed that high-end items sold well during this period.

“Other retailers of new goods” reported moderate growth at 0.9% for the quantity bought, with anecdotal evidence from opticians mentioning a surge in the sale of sunglasses during this period.

Table 2 shows month-on-month and year-on-year growth rates for online retailing, by sector, in addition to the proportion of online sales to all retail sales. The percentage weights indicate where money is spent online.

Internet sales increased by 11.0% for the amount spent in September 2018 when compared with September 2017, with all sectors showing strong year-on-year growth.

Household goods stores reported the largest year-on-year growth of 25.1% followed by textiles, clothing and footwear stores, with a growth of 19.9%.

The month-on-month picture saw a fall of 2.1% when compared with August 2018. Department stores and non-store retailers both reported falls of 9.6% and 4.5% respectively.

Online sales as a proportion of all retailing fell slightly to 17.8% from the 18.0% reported in August 2018. Food stores and textile, clothing and footwear stores, however, both reported record proportions of internet retail at 5.8% and 18.2% respectively.

The only international estimate of retail sales available for September 2018 was published by the US Census Bureau on 15 October 2018. In its advanced monthly sales for retail and food services, October 2018 (PDF, 750KB) they include the amount spent in the US retail industry, including motor vehicles and parts and food services.

Eurostat also published their latest estimates of the Volume of retail trade (PDF, 503KB) across the European Union on 3 October 2018 for August 2018. This shows the seasonally adjusted volume of retail trade in both the euro area (EA19) and EU28 when compared with July 2018.

Data for Northern Ireland are published by the Northern Ireland Statistics and Research Agency (NISRA).

It should be noted that accurate comparisons cannot be made against these or other international statistics due to a variety of reasons, including differences in methodology.

Our Monthly Business Survey (MBS) for retail sales measures output from the retail industry in Great Britain. It samples 5,000 businesses, with all businesses employing over 100 people or with an annual turnover of more than £60 million receiving an online questionnaire every month.

Further qualitative data or information and summary tables can be found in the attached datasets. This includes data on:

• response rates

• standard errors

• revision triangle

• distribution analysis

The Retail sales Quality and Methodology Information report contains important information on:

• the strengths and limitations of the data and how it compares with related data

• uses and users of the data

• how the output was created

• the quality of the output including the accuracy of the data