Retail sales see strongest growth in six months

Retail sales have seen their strongest growth in six months as shoppers updated their winter wardrobes and started the school year with new computers and uniforms.

Total UK retail sales were up 2% on last September, above the 12-month average growth of 1.1%, according to the British Retail Consortium (BRC)-KPMG Retail Sales Monitor.

However ongoing concerns among consumers about the financial outlook kept demand for big-ticket items such as furniture and white goods low, the report said.

Food sales

Food sales were up 3.1% year-on-year over the three months to September, although this was against growth of 7.4% last September and below the 12-month average growth of 4.4%.

Sales of products other than food were down 0.3% on a year ago, although this was a more moderate fall than the 1.2% decline seen last September.

BRC chief executive Helen Dickinson said: “Retail sales saw the strongest growth in six months as non-food performed better than expected.

“As autumn rolled out across the UK, shoppers sought to update their wardrobes with coats, boots and knitwear.

“The start of the month also saw a last-minute rush for computers and clothing for the new academic year.”

Crucial

Ms Dickinson added: “The coming months are crucial for the economy as retailers enter the ‘Golden Quarter’. But in the face of weak consumer confidence and the continued high burden of business rates, retailers’ capacity for further investment is limited.

“As a result, retailers are holding their breath ahead of the Budget as they work out their investment strategies for the coming year.”

Linda Ellett, UK head of consumer, retail and leisure markets at KPMG, said: “September saw modest, but welcome, sales growth for retailers.

“Children’s clothing, footwear and accessories saw a boost from the start of the school year, with household budgets feeling slightly less constrained for some parents compared to last year.

“Similarly, the return to work after summer holidays also led to an upturn in adult clothing and footwear sales. With record rainfall levels in some counties, the cold and wet weather in September sped up purchases of extra layers and wet weather gear.

“With energy prices having again risen, all eyes now turn to the Budget and what impact that will have on household discretionary spending in the final quarter of the year.”

Card spending

Separate figures from Barclays show consumer card spending increased by 1.2% year-on-year in September, with non-essential spending reaching its highest growth so far this year of 2.7% amid significant retail discounting.

Conversely, spending on essentials saw its greatest decline since April 2020, down 1.7% overall, with spending on groceries down 0.8% as consumers continued to find ways to cut costs.

However spending on entertainment reached a 14-month high – the biggest uplift since July 2023 when Taylor Swift’s Eras Tour pre-sale took place – helped by Oasis’s reunion tour sales resulting in a 35.8% year-on-year boost for live concerts and shows

Karen Johnson, head of retail at Barclays, said: “Retail’s recovery emerged as a bright spot in September, despite there being colder weather and darker evenings on the horizon.

“While shoppers remain cost-conscious, it’s clear they’re responsive to retailers’ promotional activity. Discerning shoppers are also finding room for treats and little luxuries within their budget, demonstrating that consumers are prioritising spending on things that bring them joy.”