Retail sales growth slows but beats expectations

British retailers saw sales growth slow in September, despite a "positive month" for department stores, according to official figures.

Total retail sales volumes, which measure the quantity bought, rose by 0.3% in September, the Office for National Statistics (ONS) said.

It comes after retailers witnessed 1% growth in the previous month.

Retail sales rose 0.3% in September 2024, following a rise of 1.0% in August 2024.

Computers and telecoms stores grew strongly but were partly offset by falls in supermarkets.

Read more ➡️ https://t.co/jP5Yn4lRHs pic.twitter.com/47ckvVvmsF

— Office for National Statistics (ONS) (@ONS) October 18, 2024

However, the latest reading was stronger than expected, with a consensus of economists predicting a marginal fall for September.

The Office for National Statistics revealed that non-food stores, which range from clothing to tech, saw sales volumes rise by 2.5% in September, improving from a 0.6% rise in the previous month.

The firm said this was significantly driven by technology and telecoms shops, which saw sales volumes surge by 34.7% for the month.

It was also a positive month for department stores, which reported a 1.9% increase for the month. However, food stores saw sales volumes slide by 1.9% for the month, driven by supermarkets.

Lisa Hooker, Leader of Industry for Consumer Markets at PwC UK, said: "It would have been a tall order to repeat August’s improvement in retail sales, and, sure enough, September’s results slowed slightly."

Oliver Vernon-Harcourt, Head of Retail at Deloitte, added: "A back-to-school boost saw retail sales rise for a third consecutive month, with sales of computers and additional clothing and footwear bolstering growth. While many consumers continue to hold back on purchasing big ticket items, the sale of smaller non-essential luxuries has propped up sales values. 

 "Consumer confidence continues to improve, now returning to pre-pandemic levels for the first time. While discretionary spending has seen improvement in the last quarter, with some consumers allowing budget for little treats and summer holidays, challenges remain. Some consumers are spending more, but retailers remain cautious in the sector’s most crucial few months of the year.  

"The Autumn Budget will be weighing on the minds of both consumers and retailers, with the outcome highly anticipated as we head closer to Christmas. These announcements by the Chancellor, along with potential further interest rate cuts, will influence the mood of consumers and whether they spend more in the coming months."