September saw the slowest retail sales growth since stores reopened post-COVID restrictions due to a combination of inflation, economic crisis and an unexpected bank holiday, figures show.
In-store and online sales were up just 2.8% in September from a year ago, according to BDO’s High Street Sales Tracker (HSST).
It comes after a similar poor set of results in Augustwhich was the previous lowest post-COVID performance for retail sales.
The month started with a sales increase of 3.9% and peaked in the second week at 4.9%, before falling to 2.8% and 1.3% in the third and fourth weeks , respectively.
The fourth week saw a bank holiday to mark the Queen’s funeral.
Fashion sales rose just 6.7% last September, when retailers typically expect shoppers to spend on their fall and winter wardrobes.
Lifestyle sales rose just 1.2%, even down from August, which was the sector’s previous worst performance since stores reopened in February last year.
September also saw disappointing results for the home goods sector, where sales fell 6.3%, which is believed to be a reflection of consumers postponing larger purchases after spending significant sums renovating their homes during the COVID lockdowns.
‘The only bright spot’
Sophie Michael, head of retail and wholesale at BDO, said: “While the overall comparison is not receding across all discretionary spending categories, it is clearly trending downwards.
“Furthermore, at the current level of the pound against the US dollar and the euro, import-dependent retailers are paying more for their products, reducing already slim margins.
“The only bright spot is that with the pound weak, the UK becomes an attractive destination for foreign tourists doing their Christmas shopping. However, this is unlikely to provide much of a boost to retailers beyond of flagship stores in major cities.
“Retailers will need to focus on mitigating these impacts, making operational savings wherever possible and being very smart about purchasing their products, keeping them relevant and focused on their target customer, thereby limiting the risk of large stocks at the end of the season. .
“However, with such turbulence in the broader economy, there is little that retailers can do to preserve their business and therefore there is no doubt that the sector needs to prepare for a harsh winter ahead.”
Meanwhile, the latest football figures from the British Retail Consortium (BRC)-Sensormatic IQ show that total UK footfall was down 9.8% in September from the previous three years, a comparison designed to avoid related fluctuations. with COVID, an improvement of 2.6 percentage points from August.
High streets saw a drop of 11.9%, while visits to shopping malls fell 22.7% compared to three years ago.
BRC Chief Executive Helen Dickinson said: “Influx reached its highest level since the start of the pandemic, reaching 10% of its pre-pandemic levels.
“These figures belie the collapse in consumer confidence that has resulted in declining sales volumes throughout the year. Meanwhile, skyrocketing cost inflation is putting upward pressure on prices.”