According to figures released by the country’s statistics office, retail sales fell 0.9% in September after rising 0.4% in August – a sharper decline than experts had expected. Economists advise ReutersThis indicated a decline of 0.2%.
“It was a slow month for clothing stores, as warmer weather dampened sales of cold-weather products. However, an unseasonably warm September helped boost food sales slightly,” said Grant Fitzner, chief economist at the UK Statistics Office.
The United Kingdom has recorded its hottest September ever, with clothing retailer H&M slowing sales across much of Europe due to a heat wave.
Overall, sales volume fell 0.8% in the third quarter – the biggest decline in the three months to the end of February, exacerbated by unusually wet weather that affected normal summer consumption patterns.
Overall, the statistics office indicated that weak retail performance would affect gross domestic product (GDP) growth by 0.04% – a significant figure considering the economy grew by only 0.2% in the second quarter, Reuters highlighted.
“The sharp decline in retail sales in September makes it more likely that GDP will stagnate or decline in September. That means GDP shrank in the third quarter», notes Thomas Buck, economist at RSM UK.
Clothing sales fell 1.6% in September and home improvement stores posted a 2.3% monthly drop in sales – the biggest to date – which the Office for National Statistics said was due to pressure from the cost of living.
Sylvia Rindone, Head of Retail for the United Kingdom and Ireland at EY pointed out, citing Just styleThe numbers show that fast fashion retailers must learn to adapt to increasingly unpredictable weather.
“Unseasonably warm weather in September impacted sales at non-food stores, which fell 1.9%, as consumers put off updating their shelves,” he explains. “The increasingly unpredictability of the weather is something that retailers must manage. Across the sector there is currently a large amount of off-season stock, which will lead to heavy discounts ahead of Black Friday as retailers try to stimulate weak demand among consumers,” says Silvia Rindón.
British households have seen rising costs over the past two years due to strains on supply chains and labor shortages following the Covid-19 pandemic, as well as rising energy costs following Russia’s invasion of Ukraine.
The prospects, for now, are not very encouraging. Data from the most recent consumer survey, published by GfK, indicated a drop in confidence in October and, in particular, a willingness to spend on more expensive items.
PwC also published a survey showing that almost a third plan to cut back on Christmas spending this year, due to higher food and energy prices.
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