Shops get a boost from education spending

Retail volumes in September grew 0.6 per cent month-on-month, following a downwardly revised 0.4 per cent drop in August, the Office for National Statistics (ONS) said. Economists had forecast flat sales.

But quarterly figures, which the ONS said provide a clearer insight into the health of the sector, showed sales were down 0.2 per cent as clothing and food trade tumbled over the three months.

British Retail Consortium director general Stephen Robertson said: “Christmas has always been the most important time for retail but this year is going to be particularly critical.”

Retailers have provided a mixed picture this week, with Debenhams announcing a major stores expansion plan after reporting a 10 per cent rise in profits, while Argos saw its half-year profits slide 94 per cent as sales of TVs and video games tumbled.

Household goods stores grew 3.2 per cent month on month in September, the strongest growth in 19 months, which the ONS said resulted from the start of the academic year.

The unseasonal weather at the end of the month took its toll on the clothing sector, which saw a 0.7 per cent drop in sales month on month, but the heatwave did not have the expected positive impact on food.

The improved September figures will be a slight boost to recovery hopes, as retail constitutes a significant proportion of the country’s services sector.

But the broader three-month picture is still bleak as the retail sector feels the force of the consumer spending squeeze.

The drop in volumes in riot-hit August was worse than expected, after methodological changes saw the figure downgraded to a 0.4 per cent fall instead of a 0.2 per cent drop.