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Great Britain’s retailers hit by longest spending slump since 1996

·3-min read
<span>Photograph: Amer Ghazzal/Rex/Shutterstock</span>
Photograph: Amer Ghazzal/Rex/Shutterstock

Retail sales in Great Britain fell unexpectedly for the fifth month running in September, marking the worst slump for high street shops and online sales since modern records began in 1996.

The Office for National Statistics said retail sales dipped by 0.2% in September, after an upwardly revised fall of 0.6% in August, despite the removal of most coronavirus restrictions across the UK.

Confounding expectations for a boom in consumer spending fuelled by billions of pounds in household savings built up during lockdown, retail sales volumes have fallen in each month since April.

The latest figures come as fears mount about the strength of the economy, with shortages of workers and goods and rising inflation dragging down growth and contributing to a squeeze on household finances.

Household goods stores selling furniture and lighting were the main driver of the monthly fall in spending, with a slump of almost 10% in September coming after a decline in sales in every month since a peak in May.

Sales volumes also fell for chemists, toy stores and sports equipment stores.

Retail sales volumes in Great Britain dropped by 0.2% in September 2021, driven by a fall in spending at non-food stores

Index 2018 = 100

%

75

85

95

105

115

Jan 2019

Jul

Jan 2020

Jul

Jan 2021

Jul

Guardian graphic. Source: ONS

However, clothing and department stores – among the hardest hit retailers in the pandemic – reported an increase in monthly sales volumes. Food shops also recorded a modest increase in sales.

According to the latest snapshot, in-store spending remained subdued even after most Covid-19 restrictions were relaxed this summer; with the proportion of online sales rising slightly on the month to 28.1%, remaining substantially higher than the 19.7% recorded in February 2020 before the pandemic struck.

Reflecting panic buying towards the end of the month, fuel sales rose by 2.9% to exceed pre-pandemic levels for the first time as consumers scrambled to fill up their vehicles. However, while many retailers recorded a rise in turnover during the final week of the month, others said problems with fuel deliveries dragged down sales amid shortages across the country.

Analysts said that consumers spending their weekends queueing for petrol or hunkering down at home to avoid trips out in the car could have contributed to the sales slump in September.

However, spending is anticipated to recover in October as consumers begin their Christmas shopping early to avoid disappointment after some retailers warned that the supply chain crisis could hit the availability of some toys and gifts.

Helen Dickinson, the chief executive of the British Retail Consortium, said shop owners would be concerned as they prepared for Christmas after fuel shortages, wet weather, and low consumer confidence contributed to lower consumer demand this month.

“For the sake of the UK’s economic recovery, it is vital that retail sales bounce back as we near the festive season. Labour shortages across the supply chains, on farms, factories, warehouses and lorry drivers, all threaten to derail this recovery and it is vital that government finds a long-term solution to this problem,” she said.

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