The latest data from the Office for National Statistics delivers sobering news for the UK retail industry, with a notable downturn in September. Notably, the fashion sector grappled with challenges, leading to a significant impact on overall retail sales.
In a surprising twist, retail sales volumes experienced a sharp 0.9% decline in September compared to August. This downturn surpassed analysts’ expectations, who had anticipated a more modest 0.2% decrease. More concerning still, this followed a 0.4% increase noted in the previous month.
Non-food stores bore the brunt of the impact, witnessing a substantial 1.9% drop in sales volumes. The primary culprit behind this decline? The clothing sector, which cited ongoing cost-of-living pressures and unseasonably warm weather as contributing factors that reduced demand for autumn apparel.
The broader picture paints a worrying trend. Sales volumes recorded a 0.9% monthly decrease, reflecting a 1% decline on a year-on-year basis. Most significantly, sales were down by 2.5% when compared to February 2020, the month preceding the onset of the pandemic.
In terms of value, sales experienced a 0.2% month-on-month decline, while year-on-year figures displayed a 4.7% increase. However, this disparity between volume and value trends underscores a critical issue – values are struggling to keep pace with rising inflation.
Zooming in on the non-food sector, clothing stores grappled with a 1.6% decrease in sales volumes on a monthly basis. The unexpected heatwave across much of the UK left autumn collections unsold, adding to the sector’s challenges following a difficult summer season due to unseasonably chilly weather.
Department stores also faced a parallel 1.6% decline in sales volumes, while the sub-sector of ‘other non-food stores’ reported a 2% decrease. This decline was driven notably by sectors such as watches and jewelry stores, which had previously performed well but faced a downturn this time around.
Furthermore, non-store retailing continued to experience a slump due to the lingering effects of record-breaking warm weather. Volumes fell by 2.2% as the unseasonal weather and cost-of-living concerns continued to weigh on this retail channel.
Despite this recent decline, non-store retailing’s sales volumes remained a noteworthy 15.2% above their pre-pandemic levels from February 2020.