Retail sales volumes in the UK rose 0.3% in September, slowing from a 1% increase in the previous month, due to a downturn in trade in supermarkets.
The Office for National Statistics (ONS) figures show sales growth in non-food retailers – which includes department, clothing, household and other non-food stores – accelerated to 2.5% in September, following a rise of 0.6% in August. This was underpinned by a 5.5% gain in ‘other’ non-food stores, led by a bumper month for computer and mobile phone retailers following new product launches such as Apple’s iPhone 16 and purchases for the start of the academic year.
However, this was partly offset by supermarket sales volumes falling by 2.4% – the largest month-on-month decline this year – due to poor weather and consumers cutting back on luxury food items.
On a year-on-year basis, sales volumes were up 3.9% – the largest annual rise since February 2022. However, Kris Hamer, Director of Insight at the British Retail Consortium (BRC), noted that demand for big-ticket items, such as furniture and other household goods, remained weak as consumers saved for Christmas or preferred to spend their money on experiences.
She concluded: “While the growth in sales is welcome, retailers are nervously waiting for the Budget to see if they are going to be whacked by more costs, particularly trailed changes to Employer National Insurance contributions, as well as the inflationary increase to business rates coming next year. These changes would add more pressure to an industry that already pays far more than its fair share in business taxes.
“The Chancellor should use the Budget to level the playing field with other parts of the economy, introducing a Retail Rates Corrector, a 20% downwards adjustment to the business rates bills of all retail properties. This would help drive investment and economic growth, supporting jobs, shops, high streets and communities.”
NAM Implications:
- As always, much depends on anticipation of ‘give & take’ budget moves by the government.
- Fingers crossed and limited holding of breath are recommended…
