Retail sales in Great Britain fell more steeply than expected last month, marking the latest negative economic update prior to the budget announcement by Chancellor John Healey. The Office for National Statistics reported that the volume of goods sold dropped by 0.4% month on month in September, exceeding the 0.1% decline predicted by economists. This downturn, driven in part by weak online sales of autumn and winter clothing due to unseasonably warm weather, coincides with data indicating that UK consumer confidence has experienced its fastest decline since the Covid-19 pandemic.
While retail sales declined across nearly all sectors, the volume of motor fuel sold surged by 2.2% month on month in September. This increase occurred despite record-high pump prices, returning fuel sales to levels last observed before the conflict in the Middle East began. In value terms, the 6.1% rise in fuel sales marked the largest monthly increase since March. Excluding the contribution from automotive fuel, retail sales experienced a monthly slump of 0.7%, performing significantly worse than the 0.1% decrease anticipated by the City.
Non-store retailing, which is predominantly made up of online sales, saw a 2.2% month-on-month decline, representing the largest percentage drop across the entire retail industry. Textile, clothing, and footwear shops registered a 0.9% decrease, household goods retailers encountered a 0.5% sales slump, and supermarkets slipped by 0.4%, partly affected by lower clothing sales due to the weather. The sole sector to record an increase in sales aside from automotive fuel was department stores, where the volume of purchased goods grew by 0.2% compared with the previous month.
This monthly contraction follows a strong performance in August, which the Office for National Statistics revised upward from a 0.5% monthly increase to 0.7%, lifting quarterly sales to a 0.7% year-on-year growth rate. Statisticians noted that retail sales grew over the latest quarter, led largely by motor fuel and contributions from food and drink sales that were previously aided by warm weather and the World Cup, even though they retreated slightly in September.