UK retail sales rise 2.3% in September amid inflation concerns

Non-food sales increased by 0.7 per cent year on year in September, against a growth of 1.7 per cent in September 2024. This was below the 12-month average growth of 0.9 per cent. In-store non-food sales increased by 0.5 per cent year-over-year (YoY) in September, against a growth of 0.8 per cent in September 2024. This was above the 12-month average growth of 0.4 per cent, British Retail Consortium (BRC) said in a press release.

Online non-food sales increased by 1 per cent year on year in September, against a growth of 3.4 per cent in September 2024. This was below the 12-month average growth of 1.8 per cent.

The online penetration rate (the proportion of non-food items bought online) increased to 37.6 per cent in September from 37.2 per cent in September 2024. This was above the 12-month average of 37 per cent.

“With the Budget looming large, and households facing higher bills, retail spending rose more slowly than in recent months. Milder weather meant shoppers delayed refreshing Autumn and Winter wardrobes and growth in food sales was largely inflationary rather than volume growth. Meanwhile, Electrical sales were buzzing thanks to the release of the new iPhone and Apple Watch,” said Helen Dickinson, chief executive of the British Retail Consortium (BRC).

“Rising inflation and a potentially taxing Budget is weighing on the minds of many households planning their Christmas spending. Retailers also face difficult decisions about investment and hiring over the Golden Quarter given uncertainty over business rates bills arriving in April,” added Dickinson. “The future of many large anchor stores and thousands of jobs remains in jeopardy while the Treasury keeps the risk of a new business rates surtax on the table. By exempting these shops when the Budget announcements are made, the Chancellor can reduce the inflationary pressures hammering businesses and households alike.”

“Overall sales grew in September, driven largely by household goods and increased mobile phone sales, as prominent brands launched new models. However, non-food sales are only growing by around 1.2 per cent on average, indicating that spending continues to be very targeted as consumers remain cautious.  As we enter the ‘golden’ quarter for the sector, retailers are planning product ranges and promotions to try and increase that rate of sales growth. They are also mindful that the Budget is beginning to move into view, with related detail about business rates reform and a general need for a boost to consumer confidence,” said Linda Ellett, UK head of consumer, retail and leisure, KPMG.

ALCHEMPro News Desk (SG)