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UK retail sales slump to record low for September

·3-min read
Shoppers seen walking with shopping bags along Bond Street in London. (Photo by Belinda Jiao / SOPA Images/Sipa USA)
September was a more challenging month for retailers as shoppers tightened their belts. Photo: SOPA Images/Sipa USA

UK’s retail sales volumes slumped in September, according to the Office for National Statistics (ONS), as retailers warned of higher prices over the upcoming holiday period amid rising COVID-19 cases.

Retail sales fell by 0.2% compared to August. They were down for the fifth consecutive month, the longest continuous stretch on record.

Volumes were 4.2% higher than in February 2020 levels, before the pandemic hit, ONS data showed.

Retail sales volumes over the last three months fell by 3.9% when compared to the previous three months, partly because of strong sales in April when non-essential retailing reopened.

This was the first fall in the three-month-on-three-month series since March 2021.

"After enjoying a post-pandemic recovery for most of the year, September was a more challenging month for retailers as shoppers tightened their belts amid talk of a cost of living crisis," said Lynda Petherick, head of retail, Accenture UKI, said.

“These figures will be no cause for celebration for the sector as we head into the crucial Black Friday and Christmas trading period.”

Fuel shortages, wet weather, and low consumer confidence all contributed to lower consumer demand this month, said Helen Dickinson, CEO of the British Retail Consortium.

Non-food stores reported a fall of 1.4% in sales volumes in September 2021, driven by falls in household goods stores (-9.3%) such as furniture and lighting stores, and other non-food stores (-1.7%) such as sports equipment stores.

Automotive fuel sales volumes rose by 2.9% as demand towards the end of September increased sales – volumes were 1.8% above their pre-pandemic February 2020 levels.

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Food store sales volumes were up by 0.6% and were 3.9% above pre-pandemic levels.

Despite a relaxation of COVID-19 restrictions in summer 2021, in-store retail sales remain subdued.

The proportion of retail sales online rose to 28.1% in September from 27.9% in August, substantially higher than the 19.7% in February 2020.

"With the novelty of a trip to the high street wearing off more of us have gone back to our pandemic habits of ordering with an on screen click rather than a trip to the shops," said Susannah Streeter, senior investment and markets analyst at Hargreaves Lansdown.

Meanwhile Dickinson said "retailers will be concerned by the slump in sales, just as they begin their preparations for the all-important Christmas period".

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She said that for the sake of the UK’s economic recovery, it is vital that retail sales bounce back as we near the festive season and that the government find a long-term solution to labour shortages across the supply chains.

“Labour shortages, alongside higher energy, commodity, and transport costs, are all putting pressure on prices, with three in five retailers warning of higher prices before Christmas,” she added.

Petheric said: “The greatest concern will be whether retailers are able to get consumers the products they want – be that turkeys or toys – at a time when price increases may deter consumers from buying in the first place.”

“It can’t be ignored that there is also the looming spectre of rising COVID case rates, which could see people shy away from physical retail this winter. This reiterates one of the key lessons from the pandemic – the paramount importance of a seamless and well-prepared e-commerce offer.”

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