Retail sales growth slows in Great Britain despite tech spending lift

Sales growth in shops in Great Britain slowed last month as an increase in purchases of technology was tempered by the largest monthly fall in spending at supermarkets this year.

Retail sales volumes grew by 0.3% in September, beating analyst expectations of a 0.3% drop, according to the latest figures from the Office for National Statistics (ONS). However, the monthly growth rate was still down on August’s 1%.

Sales volumes at all non-food stores -which includes clothing, household and department stores – rose by 2.5% in September. This was underpinned by 5.5% month-on-month growth from “other” non-food stores, led by computer and mobile phone retailers.

Analysts suggested this was partly down to parents stocking up for pupils as the new school year started. Oliver Vernon-Harcourt, the head of retail at Deloitte, said: “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.”

However, this was partly offset by a 2.4% fall in sales at supermarkets, the largest month-on-month fall for food stores this year.

“Retail sales grew in September as tech stores reported a notable rise in sales,” said Hannah Finselbach, a senior statistician at the ONS. “These were only partially offset by a poor month for supermarkets, where retailers said bad weather and households continuing to cut back on luxury food items hit sales.”

Sales volumes rose 3.9% across the year to the end of September, the largest annual rise since February 2022.

“September saw the strongest retail sales growth since January, and the highest sales volume since March 2022,” said Kris Hamer, the director of Insight at the British Retail Consortium. “[However], big-ticket items, such as furniture and other household goods, continued to take the hit from some consumers, such as those saving for Christmas or preferring to spend their money on experiences.”

Despite the rise, Hamer said that retailers were “nervously” awaiting the Labour budget at the end of the month, particularly the impact of a possible increase to employer national insurance contributions, as well as the annual inflationary increase to business rates next year.

“These changes would add more pressure to an industry that already pays far more than its fair share in business taxes,” Hamer said. “The chancellor should use the budget to level the playing field with other parts of the economy.”