The British Retail Consortium (BRC) and accounting firm KPMG's retail sales monitor shows total UK retail sales rose by 2% in September, fuelled by demand for new season clothing, however industry experts warn of weak consumer confidence with retailers placing hope on the government's Autumn budget.

BRC chief executive Helen Dickinson highlighted that UK retail sales experienced the strongest growth in six months, primarily driven by non-food categories as consumers seek wardrobe updates with the arrival of autumn, including coats, boots, and knitwear.

However, she cautioned that the upcoming months are “crucial” for the economy as retailers enter the “golden quarter.” She emphasised that weak consumer confidence and the “continued” high burden of business rates are limiting retailers’ capacity for further investment.

“Retailers are holding their breath ahead of the Budget as they work out their investment strategies for the coming year. Decisive action from the Chancellor, such as introducing a 20% Retail Rates Corrector, would help to drive investment and economic growth up and down the country,” she concluded.

September UK retail data summary

Credit: BRC-KPMG retail sales monitor (includes food data from IGD) 

• Total retail sales increased by 2.0% year-on-year in September, up from 2.7% in 2023, surpassing the three-month average growth of 1.2%

• Non-food sales decreased by 0.3% year-on-year over the three months to September, an improvement from a 1.2% decline in September 2023. Notably, non-food sales grew year-on-year in September

• In-store non-food sales fell by 1.5% year-on-year over the past three months, contrasting with a growth of 0.3% in September 2023

• Online non-food sales rose by 3.4% year-on-year in September, against an average decline of 3.6% in September 2023, exceeding the three-month average increase of 1.9%

• The online penetration rate (the proportion of non-food items bought online) increased to 35.6% in September from 35.1% in September 2023.

Weather transition, return to school and office bump up sales

UK head of consumer, retail and leisure at KPMG Linda Ellett termed September’s retail growth as “modest,” adding that it was still “welcomed sales growth for retailers.” She noted that the start of the school year provided a boost for children’s clothing, footwear and accessories, with household budgets feeling “slightly less contained” for some parents compared to last year.

Ellett also observed that the return to work after the summer holidays spurred an increase in adult clothing and footwear sales.

Agreeing with Dickinson, Ellett noted that record rainfall levels and cold weather in September accelerated the purchases of extra layers and wet weather gear.

However, she cautioned: “With energy prices having again risen, all eyes now turn to the Budget and what impact that will have on household discretionary spending in the final quarter of the year.”

CEO of Institute of Grocery Distribution (IGD) Sarah Bradbury echoed these sentiments, stating that shopper confidence remained “stable” in September following a summer buoyed by sports.

She warned: “As shoppers turn their focus to the upcoming winter months, news of a difficult Autumn Budget and rising energy prices will likely cause a downturn in confidence with cost-of-living concerns remaining front and centre in shoppers’ minds. With the golden quarter just beginning, retailers have been implementing seasonal ranging earlier than ever, determined to make the most of the coming key trading period.”

Earlier this month the BRC Sensormatic data revealed a 3.3% year-over-year increase in UK footfall for September, which was a notable improvement from the -0.4% decline recorded in August.