Key facts
- UK retail sales grew 1.3% in September year-on-year, up from 0.7% in August.
- Consumer card spending rose 2.0% annually in September, slowing from 2.1% in August.
- Fuel spending increased by 17.3% due to record diesel prices.
- Food sales were up 2.5%, while non-food sales grew by 0.3%.
- Bars, pubs, and clubs saw a 3.8% rise in spending.
- 67% of consumers expressed confidence in their finances, a seven-month high.
British consumers maintained a cautious approach to spending in September, with overall retail sales showing a modest increase driven largely by higher fuel costs. The British Retail Consortium (BRC) reported that total retail sales grew by 1.3% compared to the same month last year, a slight improvement from August's 0.7% rise but below the 12-month average of 1.5%.
A separate survey by Barclays, analyzing consumer card spending data, indicated a 2.0% annual increase in September, a slowdown from the 2.1% rise observed in August. This cautious spending environment comes as consumers anticipate potential increases in household bills and taxes, with many expressing nerves ahead of Finance Minister John Healey's budget announcement on October 28.
Within the BRC's figures, food sales saw a 2.5% increase, while non-food sales experienced a more subdued growth of 0.3%. Health and beauty products performed strongly, and sales of toys were boosted by new releases for Pokemon's 30th anniversary. However, clothing and footwear sales suffered due to unseasonably warm weather extending through much of September.
Barclays' data highlighted that essential spending rose by 2.5%, significantly influenced by a 17.3% surge in fuel expenditure, attributed to record-high diesel prices. Non-essential spending saw a more modest increase of 1.8%. Meanwhile, spending at bars, pubs, and clubs increased by 3.8%, marking their fourth consecutive month of growth, aided by the extended summer weather.
Despite a rise in household financial confidence to a seven-month high of 67%, a significant 68% of consumers expressed concern about the upcoming budget's potential impact on their finances. Consequently, 30% of consumers reported cutting back on non-essential spending.