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A favourable September for UK retail

Oct 21, 2024 United Kingdom

As inflation fell to its lowest level in three and a half years, UK retail sales rose by 3.6% year-on-year in value terms in September, according to the latest ONS figures

The latest ONS figures show that sales volumes increased by 0.3% in September, following an increase of 1.0% in August 2024, and by 1.9% in the third quarter compared with the previous quarter. On an annual basis, in September, retail sales grew by 4.0% in volume terms and by 3.6% in value terms, considering the slower rate of inflation.

UK inflation unexpectedly fell to 1.7% in the year to September, the lowest rate in three and a half years, mainly due to lower energy costs, as well as easing inflation of clothing and footwear.

“A back-to-school boost saw retail sales rise for a third consecutive month, with sales of computers and additional clothing and footwear bolstering growth. While many consumers continue to hold back on purchasing big-ticket items, the sale of smaller non-essential luxuries has propped up sales values”, commented Oliver Vernon-Harcourt, head of retail at Deloitte, pointing to a rise in consumer confidence.

However, he continued, “While discretionary spending has seen improvement in the last quarter, with some consumers allowing budget for little treats and summer holidays, challenges remain. Some consumers are spending more, but retailers remain cautious in the sector’s most crucial few months of the year”.

“The Autumn Budget [which will be introduced later this month] will be weighing on the minds of both consumers and retailers, with the outcome highly anticipated as we head closer to Christmas”, concluded Vernon-Harcourt.

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United Kingdom Confidence Inflation Retail Sales