Retail sales grew in September, driven by sales of clothing, energy-efficient appliances and small furnishings such as blankets, as consumers gear up for higher energy bills this winter.

bills worry

Many households are preparing for higher energy costs this winter

Total sales increased 2.2% in the month of September, up from a 0.6% rise in the same month last year, according to the latest data from the BRC-KPMG retail sales monitor.

UK retail sales also rose 1.8% in the period, swinging from a decline of 0.6% the previous year.

This was above the three-month average growth of 1.3% and the 12-month average growth of 0.9%.

Over the three months to September, non-food retail sales decreased by 0.4% on a total basis and 1.1% on a like-for-like basis. For the month of September, however, non-food retail sales were in growth.

In-store sales of non-food items were also positive in the same three-month period to September as consumers enjoy in-person shopping, up 2.2% on a total basis and 1.1% on a like-for-like basis since September 2021.

In comparison, online non-food sales declined by 2.6% in the month of September, while the non-food online penetration rate decreased to 38.4% in September from 40.5% at the same point last year.

 

BRC chief executive Helen Dickinson said: “While UK retail sales grew in September, this represented another month of falling sales volumes given high levels of inflation. As consumer confidence continued to fall, people shopped cautiously, avoiding large ticket items such as new computers, TVs and furniture.

“Many households are also preparing for higher energy costs this winter, with blankets, warm clothing and energy-efficient appliances – such as air dryers and air fryers – all selling well.

“A difficult winter looms for both retailers and consumers. Costs are increasing throughout retailers’ supply chain, the pound remains weak, interest rates are rising and a tight labour market is pushing up the cost of hiring. All of this is making it harder for retailers to reduce prices and help struggling households.

“The industry urgently needs clarity from the government about business rates next year and is calling for a freeze in the multiplier. Without this, retailers will face an £800m hike in their bills, which will inevitably put additional pressure on prices for UK consumers.”

KPMG UK head of retail Paul Martin added: “Retail sales remained positive in September with growth of more than 2% on the same period last year – but much of this will be attributed to increased prices as volume of sales continues to be challenging.

“Once again, clothing and footwear came to the rescue of the high street, and back-to-school purchasing was a driver in retail growth figures, with sales of children’s shoes up over 15%. 

“Sales of household appliances and cooking accessories also moved into positive territory this month, as consumers look to purchase more energy-efficient kitchen items in light of rising energy prices. Online sales remain down year on year and those categories that did see some growth remained in single figures.

“With interest rates, inflation, labour, energy and costs of goods continuing to climb, retailers are heading into one of the most challenging Christmas shopping periods they have had to deal with in years. Consumer confidence remains low, and retailers are having to tread a very fine line between protecting their own margins and further denting confidence by passing on price rises.

“A laser focus on their own costs and efficiencies in order to remain price competitive this festive season will be essential. As consumers focus on getting value for money through switching to own-brand items and seeking out discounts, getting pricing and promotional activity right could be the difference between a successful or dismal Christmas for retailers this year.” 

Topics