'With wage growth now consistently tracking ahead of inflation, in normal circumstances you'd expect an uptick in retail spending. However, spending fell slightly in September versus the previous month while the quantity of goods bought remained flat, as shoppers tightened their belts amid Brexit-related uncertainty.
'Compared to the same period last year, both the amount spent and quantity bought in retail sales showed strong growth of 3.4 per cent and 3.1 per cent respectively. This is surprising given the recent warnings from the British Retail Consortium about the continuing challenges facing high street retailers.
'Many retailers are continuing to discount heavily which is flattering these sales and volumes statistics, but as we've seen recently with some of the listed retailers, this is doing little to boost profitability.
'Faced with cost pressures, bricks and mortar retailers have very few levers to pull. Some are cutting staff, closing down unprofitable sites, reducing floor space, or trying to drive down rental costs. According to one recent report, over 18.2m square feet of retail space has closed in the last decade as a result of CVAs, and this shows no sign of abating.
'We also know that some retailers are looking closely at their product costs and pushing their supply chains very hard to keep margin.
'We are also seeing a polarisation on the high street whereby premium and value brands appear to be having an easier time than mass market operators targeting the middle ground. Consumers are also increasingly being drawn to brands which offer an ethical or lifestyle appeal.
'Many high street retailers have pulled all of the available levers around people, property and product, and with a lack of options remaining this has led to many of the business failures we've seen recently.
'Many operators will now be praying for a Brexit deal to give consumers the confidence to loosen the purse strings during the all-important Golden Quarter.'