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 UK retail sales achieve strongest growth in September since January
[Oct 21, 2024]





The latest ONS Retail Sales Index figures show sales up +3.6% by value in September, and +4.0% by volume.

¡°September saw the strongest retail sales growth since January, and the highest sales volume since March 2022," comments Kris Hamer, director of insight at the British Retail Consortium (BRC).

"This was thanks to areas such as clothing and computing performing particularly well, as autumn led people to upgrade their wardrobe as well as the last-minute student dash for new computers as the new academic year began. Big-ticket items, such as furniture and other household goods continued to take the hit from some consumers, such as those saving for Christmas or preferring to spend their money on experiences.¡±

¡°While the growth in sales is welcome, retailers are nervously waiting for the Budget to see if they are going to be whacked by more costs, particularly trailed changes to Employer National Insurance contributions, as well as the inflationary increase to business rates coming next year. These changes would add more pressure to an industry that already pays far more than its fair share in business taxes."

Bogdan Toma, a partner at McKinsey & Company, adds: ¡°This third month of consecutive growth sets the holiday lights aglow and could offer hope as UK retail moves towards the peak trading period.

¡°However, September saw a mixed bag for UK retail sales despite an overall upward trend. Non-food retailing, particularly specialty non-food with a +5.5% volume boost, propelled growth.

¡°Yet, September also put a particular focus on the shifting landscape of grocery retail, with volume dipping by -1.9% while online sales values rose by +1.4%. This dynamic reflects the varied performance of food retailers and product categories, highlighting an ongoing challenge within the UK grocery sector.

¡°With peak trading and gifting season approaching, it is encouraging for non-food retailers such as department stores and consumer electronics retailers to see volume increases. This accentuates the recovery trends we have observed in earlier months and comes at a critical point as retail goes into the 'golden quarter' and towards the winter holidays.

¡°Non-food retail trading is likely set to peak with the arrival of major holiday shopping events, as it does annually, with encouraging signs already evident in September's volumes. Brands have been investing significantly in preparation for these key periods such as Black Friday. Our research indicates that 40% of brands generate at least 10% of their annual ecommerce revenue from such events. Consequently, nearly seven in 10 brands (69%) plan to boost their ecommerce spending to support Black Friday.

¡°The holiday season often determines the success of many brands. To navigate this critical period, brands are assembling dedicated 'holiday season win rooms', combining marketers, pricing specialists, data scientists, and tech experts. These teams closely track the brand's performance, keep an eye on competitors, and swiftly implement new strategies.¡±

Source: furniturenews

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