As we approach the announcement of the Autumn Budget, retail sales slowed, with consumers clearly acting cautiously amidst rising bills.
With news last month of more and more retail workers becoming ‘flight risks’, an injection into the landscape is much needed ahead of Chancellor Rachel Reeves’ anticipated speech on Wednesday 26 November.
Total UK retail sales, according to the British Retail Consortium, increased by 2.3% year-on-year in September, against a growth of 2% in September 2024. This, however, was above the 12-month average growth of 2.1%. This small growth was spurred by electrical sales with the new iPhone and AppleWatch flying off the shelf.
Non-food sales increased by only 0.7% year-on-year for the same time period, even with the boost from electrical. This was against a growth of 1.7% last year and below the average growth of 0.9%.
With many retailers and jewellers investing in bricks-and-mortar, you would hope people are turning back to this more. In-store non-food sales increased only by 0.5% year-on-year though. Once again, this was against a growth of 0.8% in September 2024.
Online did not fare much better, with non-food sales increasing on 1% year-on-year, against a growth of 3.4% in September 2024. Again, this was below the 12-month average growth of 1.8%.
The online penetration rate (the proportion of non-food items bought online) increased to 37.6% in September from 37.2% in September 2024. This was above the 12-month average of 37%.
Many are hoping the government will throw them a bone, especially retailers, who would benefit from being exempted from a new business rates surtax.
With this taken off the table, “the Chancellor can reduce the inflationary pressures hammering businesses and households alike,” says chief exec of the BRC, Helen Dickinson.
Linda Ellett, UK head of consumer, retail and leisure at KPMG, said: “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% 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.”
