Commenting on the Office of National Statistics retail sales index for September 2024, Lisa Hooker, Leader of Industry for Consumer Markets at PwC UK commented:
"It would have been a tall order to repeat August’s improvement in retail sales, and, sure enough, September’s results slowed slightly. However, on an annual basis, overall retail sales grew by 4.0% in volume terms excluding petrol, which translated into 3.6% in pound note terms, once taking into account the slower rate of inflation, albeit against a relatively weak performance last September."
"Overall growth was dragged back by an uncharacteristic slowdown in grocery sales, which declined slightly year-on-year after a strong run, and in contrast to reports from major supermarkets. The only other category in decline was household goods, which was not a surprise, given continued consumer caution over discretionary and bigger ticket purchases."
"Pleasingly for the sector, every other major product category was in growth, albeit against a weaker performance last September. For fashion, this means it experienced the first month of volume growth since August 2023, after a torrid run against twelve months of unseasonal weather. This improvement was no doubt helped by better weather and back-to-school in the early part of the month outweighing a slowdown as the weather turned in the second half of September."
"The rain and floods in the second half of the month also drove more shoppers away from the high street and to their mobiles and PCs. The proportion of retail sales online increased to 27.7%, which was its highest penetration since February 2022, when shoppers were avoiding the high street at the height of the Omicron variant of Covid."
"What September’s retail sales tells us is that, while there is somewhat of a recovery since the bounceback in consumer sentiment directly after the General Election, this improvement remains fragile and unbalanced, with uneven performance from one sector of retail to another. Better weather and discounting has helped invigorate sales in some categories, while there is still nervousness around larger household purchases."
"This consumer nervousness, not helped by wider political and geopolitical uncertainties, does not augur well for the start of retail’s critical Golden Quarter. Retailers will be hoping that the Chancellor instils confidence in both operators and consumers in the forthcoming Budget."
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