- Retail sales fell 0.9% in September
- Non-food down 1.9% as cost-of-living pressures and warm weather dent demand
- Consumer confidence falls creating concern about Christmas spend
Danni Hewson, head of financial analysis at AJ Bell, comments on the latest UK retail sales figures:
“High streets already have their Christmas lights in place and though they’re not twinkling yet every retailer will be fully focused on the festive season.
“The next three months are the most important of the year for the sector, the time when people splash out on gifts for friends and family, so the fact that consumers tightened their belts in September will undoubtedly be cause for concern.
“Inflation has been falling but everyone is acutely aware that it doesn’t mean prices are falling too, and many people might have had chunky pay increases but that doesn’t mean wallets are suddenly bulging.
“Households are acutely aware of every bill, every penny, and every degree the temperature falls. People are still spending but they’re thinking about their purchases in relation to the bigger picture.
“Confidence is fragile and falling and the GfK’s latest index shows that bigger picture clearly. Consumers are grappling with higher mortgage and rental costs, concerned about winter energy bills and nervous about the awful situation in the Middle East and the potential it has for destabilising the economy further.
“Then the unseasonable warm weather we enjoyed in September meant we didn’t have to replace those winter coats or ratty woollens, we could spend a bit more on foodie treats, like burgers and beer as BBQs enjoyed one last outing.
“Yes, people are still spending but they’re being savvy and with more sites like Vinted creating opportunities to stretch budgets by choosing new to us rather than brand new, there will be added pressure on retailers to keep prices keen and make the most of promotion events like Black Friday.
“It is a somewhat improving picture when it comes to inflation and retailers will be keeping their fingers crossed that the September dip has come about because shoppers are keeping their powder dry, saving up in order to splurge later.”
