Brits spend less as fears around inflation and the November budget grow
New data published by the British Retail Consortium (BRC) shows Brits have slowed spending as more households keep an eye on inflation and the November budget.
Total UK retail sales increased by 2.3% year on year in September, against a growth of 2% in September 2024. This was above the 12-month average growth of 2.1%.
However, annual total retail sales growth slowed to 2.3% in September from 3.1% in August, but was better than the growth of 2% in September 2024.
Food sales increased by 4.3% year on year in September, against a growth of 2.3% in September 2024. This was above the 12-month average growth of 3.4%.
Non-food sales increased by 0.7% year on year in September, against a growth of 1.7% in September 2024. This was below the 12-month average growth of 0.9%.
The online penetration rate (the proportion of non-food items bought online) increased to 37.6% in September from 37.2% in September 2024. This was above the 12-month average of 37%.
“With the Budget looming large, and households facing higher bills, retail spending rose more slowly than in recent months,” said Helen Dickinson, Chief Executive of the British Retail Consortium.
Milder weather meant shoppers delayed refreshing Autumn and Winter wardrobes and growth in food sales was largely inflationary rather than volume growth. Meanwhile, Electrical sales were buzzing thanks to the release of the new iPhone and Apple Watch, she said.
“Rising inflation and a potentially taxing budget is weighing on the minds of many households planning their Christmas spending.
“Retailers also face difficult decisions about investment and hiring over the Golden Quarter given uncertainty over business rates bills arriving in April. The future of many large anchor stores and thousands of jobs remains in jeopardy while the Treasury keeps the risk of a new business rates surtax on the table.”
By exempting these shops when the Budget announcements are made, the Chancellor can reduce the inflationary pressures hammering businesses and households alike, said Dickinson.
