Key facts
- UK total retail sales grew 2.3% year-on-year in September.
- Food sales rose 4.3% year-on-year, largely due to inflation.
- Non-food sales increased by 0.7% year-on-year.
- Online non-food sales grew 1% year-on-year.
- Consumers are cautious ahead of the upcoming Budget, with some building savings buffers.
UK retail sales growth slowed in September as consumers became more cautious due to concerns about inflation and potential tax increases in the upcoming Budget. Total retail sales increased by 2.3% year-on-year, a figure that was above the 12-month average but indicated a cooling from recent months.
Food sales saw a stronger increase of 4.3% year-on-year, though this was largely attributed to persistent food price inflation rather than an increase in purchase volumes. Non-food sales grew by a more modest 0.7% year-on-year, falling below their 12-month average. This subdued performance was partly due to milder weather deterring shoppers from buying autumn and winter clothing. However, sales of electrical goods, such as the new iPhone and Apple Watch, provided some uplift.
Online sales for non-food items increased by 1% year-on-year, and the online penetration rate rose to 37.6%. Separate figures from Barclays indicated a 0.7% year-on-year fall in card spending in September, with many consumers reportedly building savings buffers in anticipation of the Budget.
Business leaders have warned that potential tax increases for companies could lead to further price rises for consumers, exacerbating inflationary pressures. The British Chambers of Commerce urged the Chancellor to avoid increasing business taxes, citing the impact of previous levies.