British retail sales unexpectedly decline in September

Retail sales unexpectedly dropped for a fifth month in a row, driven by a sharp fall in furniture stores.

The volume of monthly retail sales in Great Britain fell 0.2 per cent in September from August, the Office for National Statistics said on Friday. That missed forecasts of a 0.5 per cent expansion in a Reuters poll and marked the longest period of consecutive monthly declines since records began in 1996.

“After enjoying a post-pandemic recovery for most of the year, September was a more challenging month for retailers as shoppers tightened their belts amid talk of a cost-of-living crisis,” said Lynda Petherick, head of retail at Accenture UKI.

Sales in household goods stores, such as furniture and lighting stores, dropped 9.3 per cent in September. They were “the main driver” of the decline, while food sales ticked back up, said Darren Morgan, ONS director of economic statistics.

In contrast, automotive fuel sales volumes rose 2.9 per cent, reflecting strong demand as a fuel crisis prompted panic buying at the pump, pushing petrol sales above their pre-pandemic level for the first time.

Compared with February 2020, before the first coronavirus restrictions were imposed, sales climbed 4.2 per cent.

In-store retail sales remain subdued and the proportion of retail sales online rose to 28 per cent in September, even as Covid-19 restrictions were relaxed over the summer. Online sales were substantially higher than the 19.7 per cent in February 2020 before the pandemic struck, suggesting a permanent shift.

Separate data by the research company GfK showed on Friday that fuel shortages, soaring gas prices and rising infections damped consumer sentiment in October, which together with disappointing retail sales, fuels concerns over a consumer spending recovery in the UK.