Warm weather and supermarket price war hit food and clothing sales

LONDON, Oct 14 (Reuters) - British high-street spending recorded its biggest monthly fall in years last month as supermarkets continued to cut prices and warm weather dissuaded shoppers from buying new winter clothes.

The British Retail Consortium said total retail spending was 0.8 percent lower this September than a year ago, the steepest annual drop since April 2012 and a sharp contrast to August's robust growth of 2.7 percent.

On a like-for-like basis - a measure that strips out changes in floor space and is preferred by equity analysts - retail sales dropped by 2.1 percent. This was the steepest decline since April 2013 and well below forecasts in a Reuters poll of economists for a 1.0 percent rise.

In both April 2012 and April 2013, retail sales were depressed by the timing of Easter, and the BRC said September's falls in retail sales were the steepest since the depths of the financial crisis in December 2008 if these months were excluded.

However, the BRC said the weakness was driven by unusually warm autumn weather hitting clothing and footwear sales rather than a more general economic slowdown, and that demand for big-ticket items such as furniture remained robust.

"One warm September doesn't ruin a Christmas," said David McCorquodale, a partner at accountants KPMG, who sponsor the survey. "If temperatures drop to a more seasonal level, this cooler weather will quickly turn around retailers' fortunes."

Prospects look less rosy for supermarkets which are in the midst of a price war as established retailers such as Tesco and Wal-Mart's Asda try to fend off German discount chains Aldi and Lidl.

Total food sales in the third quarter of 2014 fell by 1.7 percent on the year, the biggest drop in five years, while like-for-like sales were down by 3.6 percent.

"Food retailers will now look to take full advantage of Halloween, firmly established as one of the biggest occasions in the annual grocery calendar," said Joanne Denney-Finch, chief executive of IGD (Milan: IGD.MI - news) , which provides grocery data to the BRC. (Reporting by David Milliken; Editing by Toby Chopra)