2010.10.1202:47:00UTC+00U.K. Retail Sales Growth Slows, Says BRC

U.K. high street sales growth weakened last month, undermined by poor sentiment among consumers, a new survey showed on Tuesday.

The British Retail Consortium said U.K. retail sales rose 0.5% on a like-for-like basis compared to a year ago in September, following a 1% expansion in August. Total sales were up 2.2%.

Food sales growth picked up in September, while non-food sales were down on a year ago for the first time since mid-2009.

BRC said poor consumer confidence was affecting sales in the high street.

"Sales growth continues to be poor. We've now had six straight months of low growth thanks to persistently weak consumer confidence and worries about the future," said BRC director general Stephen Robertson.

"There is little evidence yet of major purchases being brought forward from 2011 to beat the coming VAT increase. It's clear people are cautious and major spending is largely on hold," he added.

The U.K. VAT rate is to be raised to 20% in January 2011 from the current 17.5%, as the coalition government sets about bringing down the country's substantial budget deficit.

Sales of non-food items through internet, mail-order and phone jumped 19.1% from a year ago in September, amid increased promotional activity.

"Discounts and promotions were a big factor in persuading customers to buy but it's clear that customers are increasingly embracing the internet as a mainstream part of their shopping routine," said Robertson.

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