Unexpected Drop in Retail Sales Attributed to Warm Weather
Official data has revealed that retail sales took an unexpected hit in September as shoppers held off on purchasing autumn clothing due to unusually warm weather. Additionally, consumers grappled with the mounting pressures of the cost of living, according to the Office for National Statistics (ONS).
September marked the warmest month on record globally, a consequence of ongoing global warming and the El Niño weather event. Sales volumes declined by 0.9% during the month, a figure that surpassed economists' predictions of a 0.2% fall.
Grant Fitzner, Chief Economist at the ONS, noted that sales significantly declined in September, driven by the rapid pace of price increases that deterred shoppers, particularly for non-essential items. He stated, "It was a poor month for clothing stores as the warm autumnal conditions reduced sales of colder weather gear. However, September's unseasonable warmth did help drive up food sales a little,"
Mr. Fitzner also mentioned that fuel sales rebounded following a drop in August.
In the UK, last month ranked as the joint-hottest September on record, as reported by the Met Office. The warm weather, which included a heatwave at the start of the month, led to a 1.9% decline in trade at non-food stores.
Clothing and department stores both witnessed a 1.6% decline in sales during the month, as sales of new autumn collections, including coats, jackets, and knitwear, were adversely affected by the unusual weather conditions. Cost-of-living pressures were responsible for consumers refraining from purchasing expensive items like jewelry, watches, furniture, and lighting, as indicated by the ONS.
Helen Dickinson, CEO of the British Retail Consortium, expressed hope for the upcoming festive season, stating that "retailers are hopeful that the easing inflation we have seen in recent months will boost consumer confidence." She added that retailers would make efforts to lower prices where possible, although this might be limited by the expected increase in business rates in April.
Danni Hewson, Head of Financial Analysis at AJ Bell, stressed that every retailer would be laser-focused on the forthcoming festive season. She remarked, "The next three months are the most important of the year for the sector, the time when people splash out on gifts for friends and family, so the fact that consumers tightened their belts in September will undoubtedly be cause for concern,"
Despite the easing of inflation, she noted that "everyone is acutely aware that it doesn't mean prices are falling too, and many people might have had chunky pay increases but that doesn't mean wallets are suddenly bulging,"
In the meantime, consumer confidence saw a decline in October due to individuals' financial struggles, with Joe Staton, Client Strategy Director at GfK, an organisation that tracks shopper sentiment, attributing this decline to people "simply not having enough money to make ends meet."
He pointed out that the expenses associated with heating homes, filling petrol tanks, managing surging mortgage and rental rates, a sluggish job market, and the uncertainties stemming from conflict in the Middle East all contributed to this growing unease.
Article by BBC News
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