Britain’s retailers in September saw their sales grow by the slowest rate since shops reopened after the end of Covid-19 lockdowns, as consumers cut spending in the face of rising energy costs and inflation.
Retail sales last month increased by 2.8% year-on-year, compared with a 3.6% rise in August, according to BDO's High Street Sales Tracker.
"The actual performance for retailers may be even worse than these results suggest. With rising inflation, data suggests that the actual volume of sales is down significantly while it is higher prices that is driving the growth," said Sophie Michael, BDO's head of retail and wholesale.
Sales peaked at 4.9% in the second week of September and then fell to 1.3% in the third and fourth weeks.
Fashion sales rose 6.7%, while lifestyle sales increased by just 1.2%.
The homewares sector had a disappointing month with sales declining by 6.3%, reflecting belt-tightening by consumers after they spent significant sums improving their homes during the pandemic.
"While the overall like-for-like is not quite going backwards across all discretionary spending categories, it's clear that it's trending downwards,” said Michael.
"In addition, with the pound's current level against the US dollar and euro, retailers that rely on imports are paying more for their products, eating into already slim margins.
"The one bright spot is that with the pound's weakness, the UK becomes an attractive destination for overseas tourists doing their Christmas shopping. However, this is unlikely to provide much of a boost to retailers beyond flagship stores in major cities.”