Retail sales volumes (quantity bought) are estimated to have risen by 0.3% in September 2024, following a rise of 1.0% in August 2024.
Computers and telecommunications retailers grew strongly but were partly offset by decreases in supermarkets.
Looking at the quarter, sales volumes rose by 1.9% in Quarter 3 (Jul to Sept) 2024, when compared with Quarter 2 (Apr to June) 2024.
Silvia Rindone, EY UK&I retail lead, comments: “The latest figures from the Office for National Statistics show that retail sales rose by 0.3% in September and 1.9% in Q3 (July to September), when compared to Q 2 (April to June).
“Clothing sales saw a resurgence in September with non-food store sales volumes rising by 2.5% in September, as consumers sought to update their seasonal wardrobe, accelerated by the cooler weather.
“The next few months will be critical as retailers brace themselves for the ‘golden quarter,’ with key shopping events such as Halloween and Black Friday drawing near. Retailers will be using discounting strategies to stimulate consumer spending and manage stock levels more effectively.
“Retail sales could still be volatile in the run up to Christmas, with retailers who can target particular customers seeing more success.
“However, this year’s discounting efforts seem to be more spread, indicating less pressing need to offload stock as retailers have learned improved inventory management. However, the possibility of a ‘Black November’ remains, as retailers spread out the trading period to avoid the intense competition of the year-end rush.
“As we progress through the final quarter, it will be imperative for retailers to closely monitor sales volumes, inventory, and the competitive landscape. The balance between timely promotions and the risk of premature discounting is delicate; retailers must navigate this with care to avoid the pitfalls of either scenario—be it stock shortages or overstock. It’s a precarious path that demands strategic foresight and agility.”
Jacqui Baker, head of retail at RSM UK and chair of ICAEW’s Retail Group, comments: “The Autumn/Winter wardrobe refresh and back-to-school rush propped up retail sales in September delivering a post-summer boost, despite record-breaking rainfall and a sharp drop in consumer confidence in September.
“A fall of 1.9% in food sales dragged down the average in retail sales growth as the bad weather and consumers cutting back on luxury food items held back spending.
“As we enter the all-important Golden Quarter, retailers will be doing their best to pull out all the stops to ensure retail sales continue to pick up pace during this crucial period, particularly as competition for spend increases in the lead up to Christmas. However, this is largely dependent on consumers feeling more confident to spend, and with talks of a “painful” Autumn Budget many will undoubtably be feeling nervous about what’s to come on 30 October.
“Retailers too, are in need of clarity and support from the government. While business rates reform continues to be their number one plea, the prospect of an increase in workforce-related costs will be crippling news for many. The sector remains optimistic about the outlook for 2025, but it needs the government’s help to make this a reality.”
Oliver Vernon-Harcourt, head of retail at Deloitte, said: “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.
“Consumer confidence continues to improve, now returning to pre-pandemic levels for the first time. 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 will be weighing on the minds of both consumers and retailers, with the outcome highly anticipated as we head closer to Christmas. These announcements by the Chancellor, along with potential further interest rate cuts, will influence the mood of consumers and whether they spend more in the coming months.”
Deann Evans, managing director, EMEA at global commerce platform Shopify, commented: “After a challenging year for the retail sector, the industry will be pleased to see official figures revealing sustained growth in September. While this data signals hope for retailers, our Holiday Retail Report data shows increased spending is unlikely to be frivolous: savvy shopping is still the order of the day with 83% of Brits comparing prices in order to find the best discounts and 65% planning to shop during sales to save money. As a result, brands must create an impactful retail experience and tap into consumer intentions and emotions.
“In regard to what consumers are spending on, our data shows autumn and winter preparation is high on the agenda for UK shoppers in September, with sales of coats and jackets up by 63.7%, food warmers up by 69% and leaf blowers up by 34.8%. Conversely, picnic blankets and outdoor chairs fell by 70.5% and 68.1%, respectively. Furthermore, consumer attention has shifted noticeably towards holiday retail across both Halloween (fireworks and firecrackers sales increasing by a massive 426.3%) and Christmas (advent calendars up 212.1% and holiday ornaments up 86.6%).”
Erin Brookes, European retail and consumer lead at Alvarez & Marsal, said: “Retailers have enjoyed three months of consecutive sales growth, with Q3 marking the only quarter of consistently positive performance since Q2 2023. Record rainfall levels and an early winter chill across parts of the country drove demand for warm clothing, while non-food growth received an additional boost from computers and telecommunications retailers.
“While consumers remain cost conscious, budgets are somewhat less strained than they were a year ago. However, consumer confidence remains fragile, particularly ahead of the Autumn Budget later this month, with uncertainty about the impact on household finances.
“Against this backdrop, retailers will need to work even harder to encourage shoppers through their doors. Discounting and data-driven, targeted advertising will be an important part of this effort and are top of the agenda for management teams. Those that have curated innovative winter and festive ranges that can excite consumers, and that have gauged stock levels effectively, will be able to maximise spend in the coming ‘Golden Quarter’.”
Matt Jeffers, UK retail strategy and consulting managing director at Accenture, said: “Retailers will be relieved to see an increase in September’s sales, driven by early autumn demand for non-food items including clothing, computing and other home essentials. With cooler and wetter weather starting to set in, consumers have begun to shift their focus to seasonal and non-essential purchases, providing a much-needed lift after a challenging summer.
The next quarter is the most important trading period in retailers’ calendars, which should maintain this momentum. The grocery sector is eagerly anticipating excitement for seasonal events like Halloween and the launch of festive party food ranges to drive additional sales. Similarly, clothing retailers will be hoping for cooler autumnal weather to inspire wardrobe updates. All non-food retailers will need to get ready for Black Friday, ensuring their campaigns and stock availability is sharpened will be crucial to hitting annual numbers.”
