Retail sales fall more than expected after Queen’s funeral

High streets and supermarkets witnessed another sales slump last month as shops were knocked by customers’ continued cost-of-living concerns and closures for the Queen’s state funeral.

The Office for National Statistics (ONS) revealed that UK retail sales volumes declined by 1.4% last month.

It came after a 1.7% decline in August.

However, it was notably worse than expected, after a consensus of economists predicted retail sales would only fall 0.5% for the month.

The ONS said food stores saw sales particularly drop, sliding by 1.8% in September, continuing a downward trend since summer last year when pandemic restrictions were eased on hospitality.

It came amid a 14.5% jump in food prices in September – the biggest increase recorded since 1980, according to data modelling.

ONS director of economic statistics Darren Morgan said: “Retail sales continued to fall in September after a weak August, and consumers are now buying less than before the pandemic.

“Drops were seen across all main areas of retailing, with falling sales in food stores making the largest contribution.

“Retailers told us that the fall in September was partly because many stores were closed for the Queen’s funeral, but also because of continued price pressures leading consumers to be careful about spending.”

The ONS said non-food stores, which include fashion and homeware shops, recorded a 0.6% dip for the month.

Clothing stores specifically saw sales nudge 0.1% higher, driven by demand for footwear.

Meanwhile, non-store retailing, which is predominantly online stores, saw a 3% decline in sales volumes although this remains sharply above pre-pandemic levels.

Retailers highlighted that the death of the Queen and state funeral resulted in a reduction of trading days, reducing potential sales over the month.

Jacqui Baker, partner and head of retail at RSM UK, said: “Consumers reined in their spending last month in anticipation of a spike in their bills due to the energy price cap increase in October.

“With less than 10 weeks until Christmas, the remainder of this Golden Quarter will be a crucial trading period for retailers who normally enjoy the tills ringing at this time of year.

“It could be make or break in some cases. Many retailers will be relying on consumer demand to offload the excess stock sitting in their warehouses, particularly during Black Friday and Cyber Monday.”