Sales fell 1.4% in September as rising prices force people to cut back further, new figures out today showed.
Key highlights include:
- Bank holiday for Queen’s funeral factors in with many stores closing
- Retail sales down 1.3% on pre covid levels but value up 12% as inflation rages
- Borrowing up £2.2bn this September compared to the previous year
- Day to day spend up £5.8bn largely down to cost-of-living payments and rising interest costs
- Tax receipts recoup £4.5bn more than September 2021
Danni Hewson, AJ Bell financial analyst, comments: “A pound just isn’t stretching as far as it used to and while people have traded down, switched from brands to value lines, it’s a switch they can only make once. Food stores in particular have commented that shoppers are simply having to pay more to buy less.
“When it comes to essentials that’s leading to agonising decisions for many of the country’s most vulnerable households and even those middle earners are putting off unnecessary purchases until their financial futures look a little less bleak.
“Cutbacks are happening across the whole retail landscape and September figures fell more than had been expected, even after economists factored in the bank holiday for the funeral of Queen Elizabeth II. Store closures will have undoubtedly played a part, but it’s the lack of consumer confidence ahead of what is a crucial period for the retail sector that’s making many shop owners incredibly concerned.
“The effect of rising prices is writ large when you compare September sales with those experienced in February 2020. Sales volumes are down 1.3% but values have shot up by 12% – the numbers are stark but the impact on real lives is starker still.
“After covid we were asked to spend our way out of recession, that’s simply not going to be an option during the new recession the country is stumbling towards.”