Retail sales see biggest drop since March as food sales dive

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CVA landlords

Retail sales in the UK were far worse than expected in September as food sales plummeted after a “bumper summer”.

According to figures released today by the Office for National Statistics (ONS) today, retail sales fell 0.8 per cent last month, double the fall expected by analysts.

Food sales dragged down the overall average, having dropped 1.5 per cent marking the most dramatic monthly decline since 2015.

This was in part due to a very strong summer in which the consistent heat drove up sales of summer foods.

Despite the drop in September, retail sales continued to grow 1.2 per cent in the third quarter as strong growth in July and August offset the decline.

“The monthly data is notoriously volatile, but the year-on-year figure of 3.0% undershot economists’ forecasts of a 3.6% rise, and September’s drop dragged the three-month number down to 1.2%, the third fall in a row,” Hargreaves Lansdown’s senior economist Ben Brettell said.

“It looks like consumer spending – along with the weather – peaked in early summer and has been declining ever since.

“Where we go from here is highly uncertain. Brexit is hitting consumer confidence hard, but on the plus side wage growth has hit a decade high while inflation is falling. So consumers look likely to have more spending power – the issue is whether they choose to use it, or keep their powder dry until more clarity over Brexit emerges.”

Lloyds Bank Commercial Banking’s head of consumer Philipp Gutzwiller added: “After a summer of spending boosted by the long, hot weather, September saw shoppers tighten their belts to catch up.

“As a result, retailers have had to redouble their efforts, focusing on either steep discounts or creating the theatre that makes going shopping an experience consumers can actually enjoy.

“Both approaches are an attempt to compete with the shift to shopping online, and these figures show that online sales now account for 17.8 per cent of all spending in September.

“The real success stories are either those online specialists delivering sales direct to shoppers’ doors, or the more advanced high street brands that are using tactics like click and collect to deliver shoppers to them.”

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