UK retail sales fall 0.4% in September as households cut back
ONS figures show a steeper decline than economists expected, with online clothing sales hit by warm weather, a week before the chancellor's budget.
At a glance
- UK retail sales volumes fell 0.4% month on month in September, steeper than the 0.1% fall economists expected.
- Motor fuel sales rose 2.2% by volume despite record pump prices, while sales excluding fuel fell 0.7%.
- Online retailing fell 2.2%, the biggest sector drop, and consumer confidence is falling at its fastest rate since Covid.
Retail sales volumes across Great Britain fell 0.4% month on month in September, the Office for National Statistics (ONS) said, a steeper drop than the 0.1% decline economists had expected. The figures are the latest weak economic reading before the chancellor, John Healey, sets out his budget next week.
Motor fuel was the standout exception. Fuel volumes rose 2.2% month on month despite record prices at the pump, returning to levels last seen before the conflict in the Middle East began. Measured in value terms, fuel sales climbed 6.1% — the biggest monthly increase since 10.9% in March, the month immediately after the US-Iran conflict started.
Underlying picture weaker
Stripping out fuel, retail sales fell 0.7% month on month, far worse than the 0.1% drop the City had forecast.
Non-store retailing, mainly online, recorded the biggest sector fall at 2.2% month on month. The ONS attributed part of the weakness to poor online sales of autumn and winter clothing caused by unseasonably warm weather in September.
Textile, clothing and footwear stores fell 0.9%, household goods retailers slipped 0.5%, and supermarkets dipped 0.4%, partly because clothing ranges sold poorly in the mild conditions. Department stores were the only sector other than automotive fuel to grow, with volumes up 0.2%.
Confidence falling
The monthly decline followed a stronger August, which the ONS revised up from a 0.5% rise to 0.7%. Quarterly sales were up 0.7% year on year.
Hannah Finselbach, a senior statistician at the ONS, said growth over the quarter was led by motor fuel, which had returned to monthly sales levels last seen before the Middle East conflict began despite recent price rises. Food and drink also contributed, she said, helped partly by warm weather and the World Cup, though those sales fell back slightly in September.
The data comes as separate figures show UK consumer confidence has fallen at its fastest rate since the Covid pandemic.
Paul Dales, chief UK economist at Capital Economics, said the fall in consumer confidence and the dip in retail volumes showed times were getting tougher for households just before the key festive trading period for retailers. He said this supported his firm's view that real consumer spending and real GDP would grind to a halt in the fourth quarter of this year and the first quarter of next, and that weaker confidence made an early general election less likely.
Source: The Guardian.
Questions and answers
- How much did UK retail sales fall in September?
- The ONS said retail sales volumes fell 0.4% month on month in September, steeper than the 0.1% decline economists had expected. Excluding motor fuel, sales fell 0.7%.
- Which retail sectors did worst in September?
- Non-store retailing, mainly online, fell 2.2% — the biggest sector decline — followed by textile, clothing and footwear stores at 0.9%. Department stores were the only sector apart from fuel to grow, up 0.2%.
- Why did motor fuel sales rise while other sales fell?
- Fuel volumes rose 2.2% month on month and 6.1% in value terms, returning to levels last seen before the conflict in the Middle East began, even as pump prices hit record highs.
