British retail sales fell by a larger-than-expected 0.4% in September as a warm start to the autumn weighed on online clothing vendors and supermarkets also saw a drop in volumes, official figures showed on Friday, Reuters reported from London on October 23, citing the Office for National Statistics.
Source: Reuters
Most economists polled by Reuters had forecast a 0.1% drop in sales volumes compared with August. The Retail Bulletin, reporting the same ONS release separately, likewise put the fall at 0.4% against expectations of a 0.1% decline, after a revised 0.7% rise in August, and quoted ONS senior statistician Hannah Finselbach on the quarter.
Source: The Retail Bulletin
Over the three months to September, total sales volumes were up by 0.7%, according to the ONS, which revised up its monthly figures for August and July, Reuters said. Finselbach said retail sales grew in the latest quarter, led by motor fuel — which, despite recent price increases at the pump, had returned to monthly levels last seen before the start of the conflict in the Middle East — and that food and drink also contributed in the quarter, helped by warm weather and the World Cup, although they fell back slightly in September, the Retail Bulletin reported.
British shoppers had surprised analysts with the strength of their spending in recent months, even as the conflict in the Gulf pushes up fuel and domestic energy prices, and Tesco, Sainsbury's, Greggs and Kingfisher had all recently upgraded annual profit guidance, Reuters said. But major retailers have highlighted challenging conditions ahead of next week's budget by finance minister John Healey and signs of more inflation pressure in 2027.
September sales fell 0.4% (forecast: -0.1%) on warm-weather clothing weakness and a supermarket dip, but the quarter still grew 0.7% after upward revisions — ONS via Reuters and the Retail Bulletin. Separately, GfK consumer confidence fell 11 points to -24 in October, the Retail Bulletin and City AM reporting via Business Live said.
A survey published earlier on Friday showed consumer confidence in October suffered its sharpest month-on-month fall since early in the COVID-19 pandemic, Reuters reported in its updated version of the story; excluding the pandemic, the last similar-sized drop followed the June 2016 Brexit vote. The Retail Bulletin put the GfK fall at 11 points to -24. “The drop in retail sales in September and sharp fall in consumer confidence in October raises the risk that the economy's recent run of resilience might be coming to an end,” Thomas Pugh, chief economist at RSM UK, said, according to Reuters.
What is solid
- Retail sales volumes fell 0.4% in September against a 0.1% fall expected by economists polled by Reuters — ONS figures reported by Reuters and, separately, the Retail Bulletin
- Sales volumes rose 0.7% over the three months to September, with August revised up — ONS via Reuters and the Retail Bulletin
What is only claimed
- Whether September marks the end of household resilience is an interpretation — RSM UK's Thomas Pugh said it raises that risk, via Reuters; the quarterly figure still shows growth